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IPKINS  UNIVERSITY  STUDIES 
AND  Political  Science 

{ERT  B.  ADAMS,  Editor 


.  jUlstory  is  past  Politics  and  Politics  present  History  —  Freeman 


SIXTH  SERIES 


VII-VIII 


THREE  PHASES 


1 


COOPERATION  IN  THE   WEST 


By  AMOS  G.  WARNER 


-t#^ 


\^^ 


vHt, 


JOHNSON   REPRINT  CORPORATION 

NEW  YORK      ■*'      LONDON 
1973 


Library  of  Congress  Cataloging  in  Publication  Data: 

Warner,  Amos  Griswold,  1861-1900. 
Three  phases  of  cooperation  in  the  West. 

Original  ed.  issued  as  no.  7-8  of  History  of  cooperation  in  the  United 
States,  which  forms  the  6th  series  of  Johns  Hopkins  University  studies  in 
historical  and  political  science. 

1.  Cooperation — Middle  West.   I.  Title.   II.  Series:  Johns  Hopkins 
University.  Studies  in  historical  and  political  science,  6th  ser.,  7-8. 
III.  Series:  History  of  cooperation  in  the  United  States,  no.  7-8. 
HD3443.H55  no.  7-8     [HD3446.A3]      334'.0973s      [334'.0977] 
ISBN  0-384-66803-8  72-131 10 


These  are  two  of  the  twelve  numbers  that  constitute  Series  VI,  "History  of 

Cooperation  in  the  United  States,"  of  the  Johns  Hopkins  University 

Studies  in  Historical  and  Political  Science. 

Nos.  I-II  (bound  together)  contain  the  title-page,  table  of  contents  and 

introduction  to  Series  VI,  and  Nos.  XI-XII  (bound  together)  the  index. 

This  reprint  is  from  an  original  copy  in  the  collection  of  the  New  York 

State  Library  in  Albany.  The  publisher  wishes  to  acknowledge  the  kind 

assistance  of  the  Library. 

Reprinted  with  the  permission  of  the  original  publisher 

First  reprinting  1973,  all  rights  reserved 

Johnson  Reprint  Corporation,  111  Fifth  Avenue,  New  York, 

New  York  10003 

Printed  in  the  United  States  of  America 


VII-VIII 


THREE  PHASES 


COOPERATION  IN  THE  WEST. 


JOHNS  HOPKINS  UNIVERSITY  STUDIES 

IN 

Historical  and  Political  Science 

HERBERT  B.  ADAMS,  Editor 


History  is  past  Politics  and  Politics  present  History  —  Freeman 

SIXTH  SERIES 

VII-VIII 

THREE  PHASES 

OF 

COOPERATION  IN  THE   WEST 

By  AMOS  G.  WARNER 


BALTIMORE 

Publication  Agency  of  the  Johns  Hopkins  University 

1888 


Univ«nify  of  Ca^ifomi*^ 

344  k 

^3 

03 

Copyright,  1888,  by  N.  Murray 


BALTIMORE : 
From  the  Press  of  Gcggenheimer,  Weil  in  Co. 


TABLE  OF  CONTEXTS. 


PAGE. 

I.  COOPERATION  AMOXG  FARMERS 367-393 

In  Ohio 371 

Cincinnati  Grange  Supply  House 372 

Other  Grange  Stores 377 

Cooperative  Creameries 378 

In  Other  States 382 

Indiana 382 

Michigan  383 

Missouri 384 

Illinois 384 

Kansas 384 

Nebraska 386 

Causes  op  Failure 387 

Residual  Benefits 391 

11.  COOPERATION  AMONG  WAGE-EARNERS 394-426 

Integral  Cooperation 398 

Distibutive  Enterprises 402 

Cooperative  Association  No.  1 402 

National  Cooperative  Guild 405 

The  Streator  Cooperative  Supply  Store _ .  406 

The  Laramie  Cooperative  Association    and 

Others 407 

Productive  Cooperation 409 

Mining  Companies 411 

Furniture  Makers 415 

Planing  Mills 417 

Carpentering 418 

Stove  Works 418 

Pottery  and  Tile  Works 419 

Clothing  Factories 421 

Other  Industries 421 

Points  Omitted — Conclusions  422 

III.  COOPERATION  AMONG  MORMONS 427-439 

"Zion's  Cooperative  Mercantile  Institution" 427 

Other  Forms  of  Mormon  Cooperation 434 

365 


THREE  PHASES  OF  COOPERATION  IN  THE  WEST.^ 


CHAPTER  I. 

COOPERATION  AMONG  FARMERS. 

The  tendency  of  tlie  urban  to  outgrow  the  rural  popula- 
tion, and  the  drift  towards  the  cities  of  the  best  brain  power 
produced  on  the  farms,  have  been  often  noticed  and 
deprecated.  But  perhaps  it  has  not  been  so  generally  pointed 
out  that,  in  quite  recent  times,  the  very  nature  of  the 
farmer's  means  of  commanding  a  livelihood  has  been  essen- 
tially altered,  and  that  his  much-talked-of  independence  is 
being  effectually  undermined  by  the  same  division  of  labor 
and  differentiation  of  interests  that  has  produced  at  once  the 
strife,  and  the  interdependence  of  the  various  classes  in  the 
towns.  In  one  aspect,  perhaps,  we  may  say  that  this  tend- 
ency has  attracted  attention,  and  has  led  to  the  discussion 
of  agrarian  questions  as  related  to  our  own  country.  But 
these  discussions  have  to  do  with  the  influences — arising 
also  in  great  measure  from  the  increasing  division  of  labor 
— that  tend  to  crowd  the  small  farmer  out  of  existence.  In 
this  paper  it  is  to  the  purpose  to  speak  only  of  the  forces 
that  have  altered  the  character  of  the  farmer's  industrial 
duties,  and,  driving  liim  from  a  condition  of  actual  or 
potential  isolation,  have  compelled  him  to  become  a  depend- 


'NoTE. — The  district  v/ithin  which  I  have  undertaken  to  study 
practical  codperation  inchides  the  states  and  territories  of  Ohio, 
Micliigan,  Indiana,  Illinois,  IMi&souri,  Kansas,  Nebraska,  Colorado, 
Utah  and  Wyoming.  The  marking  out  of  this  district,  which  for 
present  purposes  may  be  termed  the  Middle  "West,  has  been  a  matter 
of  personal  convenience  and  of  agreement  between  myself  and 

367 


368  Three  Phases  of  Cooperation  in  the  West. 

ent,  though  essential,  part  of  the  modern  industrial  ma- 
chine. The  boiler  is  an  essential  part  of  the  steam  engine, 
but  it  could  not  even  pump  Avater  for  itself  without  the 
other  parts;  and  in  much  the  same  way  the  farming  popula- 
tion, though  still  at  the  basis  of  our  industrial  organization, 
must  yet  rely  upon  other  classes  to  supply  it  with  some  of 
the  things  necessary  to  its  continued  activity.  It  is  a  long 
time  since  the  farmer  and  the  manufacturer  of  textile  fabrics 
became  mutually  dependent,  the  one  for  his  raw  material 
and  the  other  for  the  manufactured  articles;  but  only  since 
the  war  has  it  become  the  rule  for  the  great  mass  of  the 
farmer's  products  to  leave  his  hands  to  be  wrought  by  others 
into  the  form  desired  for  consumption.  When  this  tendency 
had  gone  so  far  that  the  hogs  of  Iowa  were  shipped  to  Chi- 
cago to  be  butchered,  and  the  hams,  lard  and  bacon  shipped 
back  again  to  be  consumed,  the  farmer  was  certainly  no 
longer  an  independent  industrial  unit. 

The  illustration  just  used  is  not  a  good  one,  because  in 
such  a  case  the  farmer  might  re-assert  his  independence  if 
he  chose.  Certainly  no  man  who  is  the  owner  of  fat  pork- 
ers need  starve  because  he  has  not  a  chance  to  send  them  to 
some  great  packing  house.  But  in  many  cases  the  depend- 
ence is  not  only  apparent,  but  real.  No  very  considerable 
number  of  farmers  have  now  any  practicable  method  of  sup- 
plying themselves — except  through  others — with  clothing, 
shelter,  fuel,  adequate  provisions,  or  the  implements  essen- 
tial to  the  prosecution  of  their  work.  As  soon  as  the  depend- 
ence of  a  class  becomes  established,  there  are  never  lacking 
those  ready  to  take  advantage  of  it,  and  a  class,  in  order  to 
maintain  its   rights   amidst   the   conflicts   of   the   militant 


co-workers.  The  histories  of  the  individual  cooperative  under- 
takings of  this  section— with  the  exception  of  those  in  Utah— do  not 
differ  greatly  from  those  that  will  he  described  by  the  other  writers. 
Therefore,  with  the  object  of  avoiding  virtual  repetition,  an  attempt 
has  been  made  by  a  somewhat  different  classification,  to  get  special 
light  upon  certain  phases  of  the  history  of  cooperation  in  this 
country.     The  paper  was  finished  in  March,  1887.  W. 


Cooperation  Amonrj  Farmers.  369 

industries  of  the  time,  is  driven  to  organization.  Thus  it 
was  when  the  agricultural  class  found  its  special  interests 
involved  in  the  general  war  of  interests.  It  was  no  longer 
possible  to  insist  only  on  preserving  the  old,  because  the 
older  state  of  things  was  irrecoverably  gone;  and  thus  a  con- 
servative body,  from  whose  conservatism  much  had  been 
hoped,  organized  for  aggressive  warfare  through  the  state 
upon  the  ''vested  rights"  of  those  interested  in  railroads 
and  other  public  highways.  With  the  subject  of  the 
''granger  legislation ""  we  have  here  nothing  to  do;  but  the 
order  of  the  Patrons  of  Husbandry  also  endeavored  to  recon- 
quer independence  for  its  members,  by  giving  to  their  con- 
trol, through  the  means  of  cooperation,  those  industries 
upon  which  they  were  most  immediately  dependent. 

The  story  hardly  needs  retelling  of  how  sadly  they  under- 
estimated the  difficulties  in  their  way.  The  simplicity  of 
prospective  cooperation  is  apt  to  be  very  seductive;  and  the 
grange  leaders,  through  the  press  and  from  the  platform, 
talked  and  explained  till  it  appeared  an  easy  thing  tO' 
annihilate  the  despised  "middle-man,"  both  in  buying  and 
selling,  and  until  it  seemed  a  thing  not  very  difficult  for  all 
farmers  to  "  cooperate  " — as  they  termed  it — by  withhold- 
ing their  produce,  and  so  to  "bull"  the  markets  of  the 
world.  There  were  many  who  looked  forward  to  a  kind  of 
grangers'  millenium,  when  the  farmers,  instead  of  being 
fleeced  by  the  other  classes  and  robbed  of  their  earnings, 
should  manage  everything  and  be  contented  and  happy. 
But  when  they  came  down  from  the  platform  or  out  of  the 
sanctum,  and  began  the  work  of  managing  even  a  small 
cooperative  store,  the  practical  difficulties  were  found  to  be 
many.  In  tlie  first  place  they  were  handicapped  by  their 
lack  of  familiarity  with  each  other  and  with  the  methods 
necessary  to  enable  them  to  work  together — a  deficiency  be- 
queathed to  them  by  some  centuries  of  isolated  independ- 
ence. There  was  in  the  second  place  an  almost  total  lack 
of  the  knowledge  of  business  principles — as  was  indicated 
from  the  beginning  by  their  inability  to  appreciate  the  real 
24 


370  Tliree  Phases  of  Cooj^erniion  in  the  West. 

and  indubitable  services  rendered  by  middlemen.  Perhaps, 
also,  one  of  the  most  mischievous  characteristics  of  those 
who  engaged  in  the  early  cooperative  enterprises  was  an 
over-wrought  idea  of  what  cooperation  could  do  for  them; 
they  expected  too  much,  and  quit  trying  when  their  expec- 
tations were  not  fulfilled.  Back  of  this  was  also  the  thought 
in  the  mind  of  each  individual  that  he  could,  if  he  chose, 
get  along  very  well  by  the  old  plan  of  distribution,  and  if, 
at  any  time,  it  happened  to  seem  to  him  the  more  convenient 
one,  he  abandoned  the  cooperative  enterprise  without  regret. 

But  this  position  of  the  agricultural  class,  as  the  posses- 
sors of  capital  and  credit,  was  also  the  source  of  a  distinct 
advantage  which  they  enjoyed  over  those  of  the  day-laborers 
who  have  undertaken  like  enterprises.  Any  enterprise 
which  they  entered  upon  need  not  have  lacked  capital. 
The  fact  that  most  of  them  did  lack  that  very  thing,  proves 
only  the  latent  distrust,  and  still  powerful  conservatism  in 
matters  pertaining  to  their  own  affairs,  that  controlled  the 
actions  even  of  those  who  seemed  to  be  the  most  enthusiastic 
converts  to  the  idea  of  cooperation. 

The  various  experiences  of  the  different  communities 
were  so  much  alike  that  the  general  statement  will  answer 
for  them  all.  Yet,  as  an  example  of  the  class,  it  will  be- 
best  to  take  the  experience  of  the  State  Grange  and  of  the 
local  granges  in  some  one  state,  and  afterwards  the  special 
differences  which  may  characterize  the  movement  in  other 
states  can  be  stated  briefly,  and  unnecessary  repetition 
avoided.  Even  a  statement  of  the  amounts  of  money  in- 
vested and  lost  or  made  in  these  enterprises  would  be  curi- 
ous rather  than  valuable,  and  not  only  would  the  existing 
materials  for  such  a  summary  be  very  difficult  of  collation, 
but  the  materials  for  the  completion  of  it  are  no  longer  in 
existence.  As  the  state,  the  experience  of  which  in  the 
direction  of  grange  cooperation  will  furnish  the  best  point 
of  departure  for  studying  the  whole  movement,  Ohio  will  be 
taken.  The  experiences  of  the  farmers  of  this  state  will 
serve  our  present  purpose  none  the  worse  because  they  at- 


Business  Agency.  371 

tempted  much  and  achieved  nothing.     The  pathology  of 
cooperation  may  be  studied  witli  profit. 

Ohio. 

Business  Agency. — In  Ohio,  as  in  most  of  the  states,  a 
Central  Business  Agency,  or  Supply  House,  was  started 
under  the  patronage  of  the  State  Grange.  This  was  from 
the  first  under  the  management  of  W.  H.  Hill,  who  came  to 
the  work  recommended  by  his  successful  direction  of  the  local 
Supply  House  at  Lima.  The  capital  was  advanced  by  the 
State  Grange,  and  the  credit  of  that  body  was  used  in  the 
transaction  of  business,  but  the  whole  control  of  the  affair 
was  given  to  the  manager.  The  main  house  was  located  at 
Cincinnati,  and  it  was  intended,  besides  selling  to  the  vari- 
ous local  grange  stores  already  established,  that  branch 
houses  should  be  maintained  in  different  parts  of  the  state 
to  do  the  retail  business.  Goods  were  to  be  sold  at 
prime  cost.  If  any  profit  were  by  accident  to  accrue,  it 
was  to  be  turned  into  the  treasury  of  the  State  Grange. 

By  July,  1878,  Hill  declared  that  the  enterprise  was  no 
longer  an  experiment,  but  had  proven  its  right  to  exist  and 
"was  a  fixed  jiart  of  the  commercial  organism  of  the  state. 
The  manager  filled  a  column  or  more  each  week  of  the  Na- 
tional Grange  Bulletin  with  gossip  about  the  agency,  and 
the  business,  according  to  his  accounts  of  it,  had  certainly 
grown — at  least  in  the  sense  of  having  developed  along 
many  and  divergent  lines.  Besides  acting  as  purchasing 
agent  for  everything  that  a  farmer  could  want — from  thresh- 
ing machines  to  molasses — Hill  was  also  a  receiver  of  every- 
thing a  farmer  had  to  sell,  from  live  stock  to  grass  seed. 
He  became  a  sort  of  commercial  prophet  extraordinary  and 
adviser  plenipotentiary,  and  in  his  weekly  contribution  to 
the  Bulletin  made  guesses  at  the  tendencies  of  the  wheat 
market,  and  told  his  readers  who  were  the  most  reliable 
firms  from  whom  they  could  obtain  a  library  or  a  twenty- 
five-cent  dinner.     That  a  man  could  do  so  much  gratuitous 


372  Three  Phases  of  Cooperation  in  the  West. 

advertising  wisely  is  not  conceivable,  and  that  the  average 
man  could  do  it  honestly  may  be  doubted. 

At  the  end  of  each  year  Hill  made  a  report,  and  after  de- 
ducting his  own  salary  and  that  of  the  clerks,  a  small 
balance,  usually  less  than  a  hundred  dollars,  but  running 
up  to  $143.82  in  1878,  was  turned  into  the  treasury  of  the 
State  Grange.  The  business  had  at  this  time  so  extended 
itself  that  a  branch  house  was  established  at  Cleveland, 
under  the  management  of  E.  F.  Ensign.  This  branch 
house  continued  to  do  business  on  the  same  plan  as  the 
other  until  the  collapse  of  both.  A  grange  newspaper  war 
about  the  state  agency  became  bitter — Hill's  enemies  charg- 
ing him  with  dishonesty,  and  he  replying  with  assertions 
that  they  were  jealous  of  a  deserving  institution,  and  wil- 
fully withholding  support  that  should  be  accorded  it.  In- 
vestigations were  made  which  only  furnished  fresh  material 
for  disputes.  Men  wrote  to  ask  "^if  one  man  could  cooper- 
ate?" and  notwithstanding  Hill's  books,  which  were  said  to 
show  that  ho  was  handling  goods  on  an  average  commission 
of  from  one  to  three  per  cent.,  the  grange  concluded  that 
the  business  of  the  agency  had  better  be  closed  out.  Friends 
of  the  grange  and  of  Hill  are  said  to  have  paid  considerable 
sums  out  of  their  own  pockets  to  save  either  the  order  or 
the  man  from  reproach;  but  these  assertions  are  denied,  nor 
does  it  matter  much  from  our  standpoint  whether  they  are 
true  or  false.  Whether  the  exact  amount  lost  was  $20,000, 
as  many  believed — secrecy  having  led  to  exaggeration — or 
whether  it  was  very  little  or  nothing  at  all,  as  others  asserted, 
is  only  a  question  of  degree.  There  was  apparently  nothing 
in  the  government  of  the  agency  that  need  have  prevented 
it  from  losing  that  or  any  other  amount. 

CiNciNisrATi  Grange  Supply  House. — But  the  faith  of 
those  at  the  head  of  the  Ohio  State  Grange  in  the  value  of 
cooperation  was  in  no  wise  shaken.  Even  when  the  ''agency" 
was  obviously  failing  they  were  at  work  starting  an  enter- 
prise which  was  to  operate  on  strictly  cooperative  principles. 


Cincinnati  Grange  Supply  House.  373 

The  moving  spirit  *was  F.  P.  Wolcott,  then,  as  now,  editor 
of  the  American  Grange  Bulletin.  He  had  been  in  Europe 
and  studied  the  great  distributive  societies  of  England,  and 
had  been  so  convinced  of  the  expediency  and  stability  of 
such  societies  that  he  had  bought  stock  in  some  of  the  Eng- 
lish concerns,  and  was  now  ready  to  make  other  investments 
in  like  organizations  in  this  country.  In  September,  1880, 
there  was  a  meeting  of  stockholders  to  take  steps  toward  the 
organization  and  incorporation  of  the  Cincinnati  Grange 
Supply  House. 

The  committee  on  constitution  and  by-laws  were  instruc- 
ted to  prepare  them  as  nearly  in  accordance  with  the  Ivoch- 
dale  model  as  the  laws  of  Ohio  permitted.  The  Supj^ly 
House,  located  at  Cincinnati,  was  to  be  the  central  or  whole- 
sale house  for  the  grange  stores  of  Ohio,  Indiana,  Kentucky 
and  West  Virginia.  The  ultimate  object  was  the  establish- 
ment of  a  system  of  cooperative  stores  over  all  the  middle 
west,  which  should  be  tributary  to  the  one  at  Cincinnati,  or 
to  like  houses  in  other  large  cities.  It  was  at  first  suggested 
that  of  the  nine  directors  of  the  company  three  should  be 
chosen  from  Ohio,  and  two  from  each  of  the  other  states 
named  above.  But  as  West  Virginia  farmers  did  not  feel 
sufficient  interest  to  buy  any  stock  at  all,  and  as  little  was 
sold  in  any  state  but  Ohio,  the  constitution  finally  provided 
that  at  least  five  of  the  directors  should  come  from  Ohio. 

As  the  law  best  adapted  to  its  purposes,  the  company 
organized  under  the  general  act  for  incorporating  mutual 
insurance  societies;  but  though  this  law  may  have  been  the 
best  on  the  statute  books,  it  was  very  ill-adapted,  indeed,  to 
the  i:)urposes  in  hand.  In  the  first  place  it  was  found  im- 
possible to  provide  for  voting  on  any  other  basis  than  that 
of  the  amount  of  stock  held.  Wolcott  desired  that  the 
company  begin  business  with  the  mutual  understanding 
among  the  stockholders  that  each  man  should  have  but 
one  vote,  no  matter  how  much  stock  he  held.  In  other 
words,  he  appreciated  the  fundamental  importance  of  this 
provision,   and  desired  those  holding  more  than  a  single 


374  Three  Phases  of  Cooperation  in  the  West. 

share  to  voluntarily  resign  their  legal  rights  till  a  better  law 
could  be  enacted.  But  the  sticklers  for  the  exact  conformity 
of  all  the  methods  of  the  company  to  the  existing  law  over- 
ruled his  wish  to  try  the  experiment  of  government  by 
comity.  Another  conflict  with  the  law  under  which  they 
were  to  operate  occurred  when  they  made  the  j^rovision  that 
if  any  stockholder  should  sever  his  connnection  with  the 
order  of  Patrons  of  Husbandry — no  stock  being  issued 
except  to  members  of  the  grange — he  should  be  obliged  to 
hand  in  his  stock,  and  the  company  was  then  to  pay  him, 
within  six  months,  the  par  value  of  the  stock  resigned. 

The  capital  stock  of  the  company  was  to  amount  to 
$50,000,  divided  into  shares  of  five  dollars  each,  and  no 
person  was  to  be  allowed  to  hold  more  than  one  hundred 
shares.  As  farmers  are  producers  as  well  as  consumers,  it 
was  thought  advisable  to  make  provision  for  the  doing  of  a 
commission  business,  indicating  that  the  same  tendency  to 
consider  all  sorts  of  ''business^'  a  simple  matter,  and  easy 
of  management,  had  not  been  got  rid  of  through  the  disas- 
trous experiment  with  the  agency.  An  invoice  was  to  be 
taken  twice  a  year,  and,  not  willing  to  trust  simply  to  the 
natural  force  of  the  English  language,  the  help  of  the 
printer's  italics  was  called  in — the  constitution  setting  forth 
that  '4n  such  invoice  due  allowance  7nust  be  made  for  any 
shrinkage  in  value  that  may  have  occurred  since  the  last 
invoice  in  merchandise,  or  other  property  of  this  associa- 
tion.'' The  constitution  was  printed  at  the  Grange  Bulletin 
office,  and  it  may  be  suspected  that  Editor  Wolcott  is  re- 
sponsible for  the  italic  emphasis,  which  continues  as  follows: 

' '  They  (the  directors)  shall  require  all  the  business  of  this 
association,  buying  and  selling,  to  be  done  strictly  on  a  cash 
basis,  and  under  no  circumstances  permit  a  departure  from 
this  rule." 

Abandoning  the  old  plan  of  distributing  at  cost,  the 
goods  handled  were  to  be  sold  at  the  regular  market  price, 
but  no  deviation  was  to  be  made  in  any  case  from  the  prices 


Cincinnati  Grange  Supply  House.  375 

marked,    in    favor    of    any   purchaser    whatever.     Article 
XXIII.  related  to  division  of  profits,  and  was  as  follows: 

"The  net  profits  of  this  association  shall  be  determined  by  de- 
ducting from  the  apparent  profits,  as  shown  by  the  ledger  accounts, 
the  cost  of  management,  which  shall  include  the  salaries  of  officers 
and  all  employes,  storage,  freight,  and  all  other  items  of  expense 
incurred  in  the  management  of  the  business,  interest  at  the  rate  of 
six  per  cent,  per  annum  on  all  paid-up  stock,  and  the  shrinkage  in 
value  as  shown  by  invoice. 

"The  said  net  profits  shall  be  divided  among  the  Patrons  of  Hus- 
bandry who  have  purchased  goods  from  the  association  in  the  pre- 
ceding half  year,  in  proportion  to  the  amounts  purchased  as  shown 
by  the  ledger  accounts;  but  patrons  who  are  not  members  shall  re- 
ceive only  one-half  the  proportion  of  those  who  ai-e  members  of 
the  association." 

At  the  end  of  the  first  year  the  net  gains  amounted  to 
$1,328,  which  was  all  paid  out  either  as  interest  on  paid-up 
stock,  or  as  dividends  to  purchasers.  There  was  no  pro- 
vision for  a  reserve  fund,  and  so  no  possibility  of  saving  the 
company  from  borrowing  or  assessing  the  stockholders 
whenever  reverses  might  come.  In  fact,  during  this  first 
year  SI, 500  had  been  borrowed  at  six  jDer  cent.  In  spite  of 
the  emphatic  italics  used  in  printing  the  constitution,  the 
exhibit  of  resources  contained  the  startling  item:  "Sun- 
dry book  accounts,  84,49G;"  and,  besides  the  "borrowed 
money,^'  the  "goods  on  deposit  to  be  paid  for  when  sold," 
and  the  "undrawn  salaries,'^  there  was  also  seven  hundred 
and  seventy-eight  dollars  of  "other  indebtedness. '^  More 
than  all  this,  there  was  included  on  the  debit  side  of  the 
loss  and  gain  account  the  small  but  significant  item  of  four 
dollars  lost  on  debts. 

During  the  next  six  months  an  old  bill  for  expenses  of  the 
man  that  had  canvassed  the  state  to  sell  the  stock  came  in, 
and  other  evidences  of  slip-shod  accounts.  One  of  the  most 
discouraging  features  about  the  third  semi-annual  report 
was  the  fact  that  it  was  presented  at  a  regular  meeting  of 
the  stockholders  at  which  there  was  not  a  quorum  present. 

As  it  required  only  twenty  for  a  quorum,   and  as  there' 


376  Three  Phases  of  Cod2}eration  in  tlte  West. 

were  some  seven  hundred  stockholders,  the  complete  apathy 
with  which  the  enterprise  was  regarded  by  all  but  a  few  may 
be  inferred. 

According  to  the  statement  for  January,  1883,  though 
the  amount  of  paid-up  stock  had  increased  to  nearly  thirteen 
thousand  dollars,  yet  the  amount  of  indebtedness  of  various 
kinds  had  also  increased:  the  value  of  the  merchandise  sold 
had  shrunk  to  $67,098,  that  of  the  commission  business 
reached  only  $38,042,  and  the  net  profits  were  $1,080. 
Among  the  resources,  the  ^'book  accounts"  had  reached  the 
sum  of  $6,282 — the  italics  to  the  contrary  notwithstanding. 

Whenever  a  man  of  moderate  business  capacity  begins  *'to 
get  involved,"  the  chances  are  that  he  will  conclude  that 
the  one  thing  needful  is  for  him  to  extend  his  business.  So, 
as  things  began  to  get  tangled  in  the  affairs  of  the  Cincin- 
nati Grange  Supply  House,  the  men  in  charge  decided  that 
matters  would  be  much  helped  by  starting  a  branch  estab- 
lishment. In  1883  this  company,  that  had  to  borrow  money 
to  carry  on  its  own  affairs,  sent  ofE  about  two  thousand  five 
hundred  dollars  of  its  much  needed  capital  to  start  a  branch 
house  at  Cleveland,  which  was  credited  with  having  earned 
during  the  six  months  a  net  profit  of  forty-three  dollars  and 
ninety-four  cents.  The  total  net  profit  of  the  whole  con- 
cern for  the  same  time  was  only  four  hundred  and  forty-eight 
dollars,  which  barely  equalled  the  interest  on  paid-up  stock. 
During  the  next  half  year  the  volume  of  business  and  the 
net  profits  increased  somewhat,  but  the  amount  of  '^accounts 
outstanding"  had  now  reached  almost  $9,000,  though  some 
of  them  h^d  been  settled  by  the  acceptance  of  "^  bills  receiv- 
able" to  the  amount  of  $1,100. 

When  I  was  in  Cincinnati  in  June,  1886,  the  Grange 
Supply  House,  which  it  had  been  hoped  would  be  the  parent 
of  cooperative  enterprises  over  the  whole  West,  was  appa- 
rently in  the  last  agonies  of  dissolution.  In  the  hands  of 
Eeceiver  Harrison  it  was  thought  that  everything  would  be 
speedily  wound  up;  but  these  "^'artificial  persons,"  or  "legal 
entities,"  that  we  call  corporations,  sometimes  find  it  hard 


other  Grange  Stores.  377 

to  die.     It  has  been  so  in  this  case.     A  letter  bearing  the 
date  October  25,  1886,  contains  the  following: 

"  The  Grange  Supply  House  is  still  in  course  of  liquidation.  It  is 
hoped  that  it  will  pay  out  with  total  loss  of  stock — but  if  lease  of 
property  is  made  valid,  then  they  will  settle  by  an  assessment  on 
the  stockholders  of  at  least  twenty  per  cent.  I  seriously  doubt  any 
early  efforts  at  co5peration  among  farmers.  They  have  had  quite 
enough  for  the  present,  and  this  generation  will  hardly  forget  the 
cooperative  failures  of  the  past  fifteen  years." 

Other  Gkaxge  Stores. — During  the  halcyon  days  of  the 
grange  there  was,  at  least  for  a  short  time,  a  grange  store  in 
nearly  every  county  in  Ohio,  but  so  far  as  I  have  been  able 
to  learn  not  one  of  them  is  now  in  existence;  or,  even  if  the 
store  remains,  all  the  cooperative  features  have  long  since 
disappeared.  At  Hillsboro'  a  local  supply  house  was  started 
and  a  man  chosen  to  manage  it  who  had  failed  in  his  own 
business.  To  insure  a  suthcient  degree  of  cheapness,  the 
directors  passed  an  iron  rule  that  no  goods  whatever  should 
be  sold  at  more  than  ten  per  cent,  profit.  The  merchants 
of  the  place  combined  and  made  prices  very  low  on  staple 
articles,  and  the  grange  establishment,  being  unable  to  make 
good  the  loss  through  higher  profits  on  other  articles,  was  at 
a  serious  disadvantage.  The  stockholders  themselves  with- 
drew their  j^atronage,  yielding  to  the  temptation  of  tempo- 
rarily low  prices  elsewhere,  and  the  cooperative  store  failed 
disastrously.  At  the  close  the  stockholders  endeavored  to 
give  their  stock  away  to  escape  assessments,  but  could  not 
do  it. 

The  regular  competitive  stores  in  the  various  places  were 
inclined  to  measure  the  danger  to  themselves  by  the  aims 
and  anticipations  of  the  advocates  of  cooperation.  As  the 
latter  declared  their  intention  of  annihilating  middlemen, 
it  is  not  strange  that  these  were  inclined  to  combine  for  the 
the  annihilation  of  cooperative  enterprises.  Thus  at  Lima 
established  merchants  of  the  place  made  an  arrangement 
among  themselves  by  which  one  agreed  to  sell  one  staple 
article  below  cost,   another  another,   and  in  this  way  thev 


378  Three  Phases  of  Cooperaiion  in  the  West. 

drew  patronage  from  tlie  grange  liouse  and  caused  its  col- 
lapse. At  Zanesville  and  at  other  places  public  spirited 
individuals  paid  out  of  their  own  pockets  the  losses  incurred 
by  these  ill-starred  cooperative  affairs.  At  Dayton  one  of 
the  grange  stores  held  out  longer  than  those  in  other  parts 
of  the  state,  but  finally  succumbed.  Where  there  was  no 
public  spirit  to  break  the  severity  of  the  downfall  of  these 
institutions,  the  results  were  even  more  disastrous.  I  was 
assured  that  there  were  even  yet  as  many  as  a  hundred  law- 
suits which  had  their  origin  in  cooperative  enterprises, 
"^dragging  their  slow  length^'  through  the  courts  of  High- 
land county. 

As  an  example  of  the  manner  in  which  many  of  these 
stores  retained  the  adjectives  *' cooperative '^  in  their  title 
through  the  principle  evaporated  at  an  early  day,  we  may 
say  a  word  of  the  attempt  at  Geneva.  Here  it  was  found 
that  if  a  good  stock  was  not  kept  for  patrons  to  select  from 
they  would  trade  elsewhere.  The  increase  of  stock  necessi- 
tated an  increase  in  capital  and  in  clerk  hire,  and  it  was 
found  that  with  these  additional  expenses  goods  from  this 
store  were  not  so  very  much  cheaper  than  those  purchased 
elsewhere.  So  the  management  passed  into  the  hands  of 
an  ordinary  joint  stock  company  of  limited  membership. 

CooPEEATiVE  Creameeies. — The  only  noteworthy  ex- 
ample of  productive  cooperation  among  farmers  in  Ohio  is 
to  be  found  in  the  creameries  located  in  the  principle  grazing 
counties  of  the  state.  These  are  enterprises  that  have  grown 
up  without  the  help  of  lecturers,  or  newspaper  editorials,  or 
any  of  the  noisy  enginery  of  a  state  organization.  They 
were  started  because  it  was  believed  they  would  be  immedi- 
ately profitable  to  those  engaged;  they  were  continued  on  a 
cooperative  basis  because  that  method  of  operation  was  in 
fact  found  to  be  profitable,  and  the  element  of  cooperation 
is  at  present  being  pretty  rapidly  eliminated  from  their 
management  because  the  resulting  increment  of  profits, 
owing  to  the  efforts  of  competitors  and  the  general  state  of 


Cooperative  Creameries.  379 

the  market,  is  so  small  that  many  farmers  short-sightedly 
refuse  to  ''bother'"  with  them  longer.  One  gentleman, 
who  is  quite  well  acquainted  with  the  circumstances,  esti- 
mates that  this  form  of  cooperation  must  be  the  basis  of 
twenty  to  forty  per  cent,  of  the  farming  in  the  counties  of 
Geauga,  Ashtabula,  Portage  and  Summit.  But,  after  as 
careful  an  investigation  of  the  matter  as  the  circumstances 
permit,  I  feel  sure  that  this  is  an  over  estimate. 

As  best  showing  the  history  and  extent  of  this  form  of 
industry,  and  as  indicating  the  vibration  between  the  coopera- 
tive and  the  ordinary  method  of  managing  the  factories,  a 
sketch  will  be  given  of  their  history  in  Geauga  county.  All 
the  materials  for  this  statement  were  obtained  through  the 
kindness  of  J.  0.  Converse,  editor  of  the  Geauga  Rejmbli- 
can,  and  of  William  Howard,  the  county  auditor. 

In  1862  a  Mr.  Stanhope  erected  a  cheese  factory  in  Bain- 
bridge,  of  sufficient  capacity  to  manufacture  into  cheese  the 
milk  of  one  thousand  cows.  The  proprietor  engaged  to  fur- 
nish all  the  incidentals,  manufacture  the  cheese,  and  care 
for  the  same  until  sold,  at  a  certain  rate  per  hundred  pounds. 
The  patrons  arranged  for  the  delivery  of  the  milk  at  the 
factory,  and  appointed  each  year  a  man  to  attend  to  the 
selling  and  to  distribute  the  net  proceeds  of  the  sales  in 
proportion  to  the  amount  of  milk  furnished.  This  method 
was  pursued  with  entire  success  for  some  twelve  years,  and 
in  some  localities  is  still  emjDloyed.  It  is  said  to  bring  to 
the  dairymen  greater  returns  for  the  milk  produced  than 
any  other  plan.  Before  1873  fifteen  of  these  factories  had 
been  established  in  Geauga  county  at  an  aggregate  expense 
of  about  820,000,  and  with  few  exceptions  these  were  man- 
aged according  to  the  plan  described  above. 

In  1874  the  price  of  cheese  had  become  so  low  that,  as. 
the  owners  of  the  factories  refused  to  reduce  the  price  per 
hundred,  the  dairymen  in  some  localities  formed  joint-stock 
companies  for  the  manufacture  of  cheese  at  prime  cost,  the 
members  of  the  company  being  numerous  enough  to  fur- 
nish all  the  milk  for  which  the  factory  had  capacity.     After 


380  Three  Phases  of  Co'Operation  in  the  West. 

reckoning  the  interest  on  the  first  cost  of  tlie  buildings  re- 
quired, tlie  running  expenses  and  the  cost  of  repairing,  it 
was  found  tiuit  cheese  could  be  manufactured  for  ninety 
cents  per  hundred.  To  prevent  any  further  action  in  this 
direction,  the  owners  of  the  factories  immediately  engaged 
to  bear  all  the  incidental  expenses,  to  do  the  Avork  of  manu- 
facturing, and  to  care  for  the  cheese  until  sold  for  one  cent 
per  pound.  This  to  a  large  extent  satisfied  the  dairymen 
until  an  attempt  was  made  by  the  owners  of  factories  to 
control  the  dairy  interest  by  buying  the  milk  delivered  at 
the  factory.  This  method  has  not  given  general  satisfaction, 
because  of  a  combination  on  the  part  of  owners  of  factories 
to  control  prices.  As  a  rule,  dairymen  are  better  satisfied 
to  have  the  milk  of  their  dairies  made  into  cheese  at  a  rea- 
sonable rate  per  hundred  and  sold  at  the  market  price.  Mr. 
Howard  reckons  the  profit  on  capital  invested  in  cheese 
factories  at  fifty  per  cent.,  and  says  it  would  bo  yet  larger, 
but  that  factory  property  depreciates  in  value  very  rajDidly. 
Of  course  it  is  not  possible  that  a  regular  jorofit  so  large  as 
this  could  be  surely  earned,  although  it  is  a  business  where 
the  money  investment  is  small  as  compared  with  the  value 
of  the  annual  product. 

The  factories  that  were  erected  on  the  joint-stock  plan 
have  usually  been  rented  to  reliable  parties  for  a  term  of 
years.  The  lessee  engages  to  manufacture  the  milk  deliv- 
ered at  the  factory  each  day  at  a  certain  rate,  usually 
seventy-five  cents  per  hundred-weight  of  cheese.  This 
method,  the  most  decidedly  cooj^erative  in  princij^le  of  any, 
has  been  found  very  satisfactory  in  many  localities.  The 
manufacturer  gets  fair  pay  for  his  work,  and  the  dairy- 
men get  all  for  the  milk  that  the  market  value  of  the  pro- 
duct warrants. 

The  annual  prodiTct  of  cheese  in  most  of  the  counties 
in  Ohio,  and  notaljly  in  Geauga  county,  has  been  steadily 
decreasing  since  1874.  In  that  year  the  amount  of  the 
product  was  5,227,703  pounds.  In  1884  it  was  only  3,446,- 
"941  pounds,  showing  a  net  decrease  of  1,780,701  pounds. 


Cooperative  Creameries.  t381 

This  diminution  is  attributed  for  the  most  j^art  to  the  ex- 
tensive adulteration  of  dairy  products,  which  reduces  the 
value  of  those  that  are  genuine  by  partly  satisfying  the  de- 
mand with  an  inferior  article. 

In  Lake  county  the  one  cheese  factory  operates  on  the 
plan  of  paying  the  manufacturer  by  the  hundred,  and  then 
dividing  the  proceeds  among  the  dairymen.  In  Ashtabula 
county  the  dairy  interest  is  quite  large,  and  the  cooperative 
principle  obtains,  to  a  very  considerable  extent,  the  method 
adopted  being  that  of  Lake  county.  In  Cuyahoga  county, 
a  correspondent  much  interested  in  such  matters,  writes 
that  cooperative  creameries  are  in  that  county  nearly  a  thing 
of  the  past.  There  is  one  cooperative  cheese  factory  near 
Chagrin  Falls,  which  is  thought  to  give  its  patrons  slightly 
better  results  than  other  establishments  in  the  county 
where  the  milk  is  sold  on  delivery.  The  same  correspond- 
ent, in  speaking  with  regret  of  the  decay  of  the  cooperative 
element  in  the  management  of  these  concerns,  lays  special 
stress  upon  its  educational  value,  though  this  form  of  coop- 
eration may  possibly  be  considered  a  very  mild  one.  In  the 
days  when  most  of  the  creameries  and  cheese  factories  were 
cooperative,  the  weekly  county  paper  found  it  profitable  to 
take  markets  by  telegraph  on  the  day  of  going  to  press, 
Avhile  now  the  farmers  are  indifferent  to  the  condition  of 
the  market,  as  they  sell  their  milk  on  prices  established 
about  once  a  month. 

Taken  all  in  all,  we  find  that  this  form  of  cooperation 
among  dairymen  farmers  in  northern  Ohio  is  the  most  un- 
ostentatious and  tlie  most  successful  part  of  the  movement 
for  rural  cooperation  in  that  state.  In  fact,  it  is  the  only 
example  of  success,  and  the  only  branch  of  business  in 
which  the  farmers  have  tried  to  apply  the  principle,  that 
the  result  has  not  been  disastrous.  Though  even  in  this 
branch  of  industry  the  cooperative  element  is  now  in  abey- 
ance, yet  it  is  demonstrated  that  this  form  of  organization 
may  be  an  etficient  weapon  in  the  hands  of  the  farmers 
whenever  the  owners  of  factories  become  oppressive  in  their 


382  Three  Phases  of  Cooperation  in  the  West. 

exactions.  The  reasons  for  the  success  achieved  are  not  far 
to  seek.  The  capital  necessary  is  not  large  in  proportion  to 
the  value  of  the  annual  product,  the  details  of  the  business 
of  manufacturing  are  simple  and  can  be  safely  intrusted  to 
a  salaried  superintendent,  or  one  who  receives  so  much  per 
pound  for  the  article  manufactured,  the  product  is  a  staple 
for  the  selling  of  which  no  advertising  is  necessary,  and 
from  beginning  to  end  no  secrecy  is  required. 

Other  States. 

I]srDiA]S'A. — In  Indiana  much  the  same  line  of  action  was 
taken  as  in  Ohio.  During  the  time  of  the  grange's  greatest 
prosperity  a  state  grange  agency  was  established,  which  for 
a  while  did  a  large  and  apparently  profitable  business.  In 
1876  the  transactions  of  this  concern  amounted  to  nearly 
one  thousand  dollars  jier  day.  But  the  agency  was  badly 
managed,  a  large  stock  of  unsalable  articles  accumiilated 
in  the  hands  of  the  agent,  irresponsible  parties  were  trusted, 
and  there  was  great  shrinkage  in  values.  As  a  result  of 
these  perfectly  adequate  causes,  the  agency  became  bankrupt, 
and  the  State  Grange  of  Indiana  lost  about  six  thousand 
dollars  through  the  failure.  Of  the  many  local  cooperative 
stores  that  began  business  in  Indiana  some  still  survive,  of 
which  the  most  successful  and  the  most  noted  is  the  Hunt- 
ington Cooperative  Association. 

The  enterprise  was  begun  seven  years  ago,  and  has  from 
first  to  last  operated  upon  the  Kochdale  plan,  as  far  as  the 
laws  of  Indiana  permit.  The  association  began  business 
with  a  capital  of  only  five  hundred  dollars,  which  has  since 
increased  to  $20,000.  The  annual  transactions  of  the  con- 
cern average  about  865,000.  In  1883  it  handled  over 
8100,000  of  goods  and  paid  a  quarterly  rebate  on  purchase- 
checks  of  fourteen  per  cent,  to  stockholders,  and  seven  per 
cent,  to  non-sharing  patrons.  Somewhat  higher  rebates 
have  at  times  been  paid.  "Within  the  last  two  years  the 
association  has  sold  almost  as  many  goods  as  in  1883,  but 


Lansing  Cooperative  Association.  383 

has  been  compelled  to  handle  them  on  such  close  margins 
that  the  rebates  have  been  comparatively  small. 

In  the  state  of  Indiana  the  grangers  made  some  attempts 
to  organize  cooperative  companies  for  the  manufacture  of 
farm  implements,  but  these,  without  exception,  resulted 
disastrously. 

Michigan. — Three  successful  or  semi-successful  stores 
are  left  over  from  the  wreck  of  high  hopes  and  ambitious 
undertakings  in  Michigan.  The  most  prosperous  of  these 
is  the  Cooperative  Association  of  the  Patrons  of  Husbandry 
of  Allegan  county,  that  ''deals  in  everything  except  intoxi- 
cating drinks. ''  Shares  are  ten  dollars  each.  The  first 
share  owned  gives  the  holder  a  right  to  one  vote,  and  he  has 
but  one  additional  vote  for  each  fifty  shares  that  he  may  pay 
for  thereafter.  The  number  of  shares  is  not  limited,  but  no 
one  at  present  holds  more  than  fifty.  Capital  paid  in  is 
$25,650,  the  number  of  shareholders,  five  hundred  and 
twenty-five.  Goods  are  sold  at  cost  and  four  per  cent,  is 
added  to  the  bill.  Five  per  cent,  interest  is  paid  on  stock. 
The  manager  is  responsible  for  all  credit  given.  Annual 
sales  for  the  last  two  years  have  been  $101,000. 

The  Battle  Creek  Cooperative  Association  of  the  Patrons 
of  Husbandry  and  Sovereigns  of  Industry  is  also  prosperous. 
The  capital  is  $6,000,  held  by  one  hundred  and  seventy-five 
stockholders.  Shares  are  ten  dollars  each,  no  one  person  to 
hold  more  than  forty  shares,  and  no  shareholder  to  have 
more  than  one  vote.  Goods  are  sold  to  all  customers  at 
current  rates,  and  profits  divided  among  stockholders. 

The  Lansing  Cooperative  Association  of  the  Order  of  the 
Patrons  of  Husbandry  was  very  successful  until  the  last  year 
or  so,  when  its  store  has  been  rather  overstocked,  and  goods 
have  so  depreciated  as  to  reduce  profits.  "W.  J.  Beal,  pro- 
fessor of  botany  and  forestry  in  the  Agricultural  College  of 
Michigan,  has  been  a  prominent  member  of  this  association 
and  it  is  through  his  kindness  that  I  have  obtained  most  of 
the  facts  regarding  grange  cooperation  in  this  state.     The 


384  Three  Phases  of  Cooperation  in  the  West. 

association  began  some  twelve  years  ago,  with  a  capital  of 
three  hundred  dollars;  it  has  now  a  paid-up  capital  of 
818,000.  Shares  are  ten  dollars  each — no  one  allowed  to 
hold  more  than  fifty — and  votes  are  in  proportion  to  stock 
held.  The  sales  have  averaged  one  hundred  and  seventy 
dollars  per  day.     Present  prospects  are  very  encouraging. 

Illinois. — In  this  state  there  were  at  one  time  coopera- 
tive stores  in  fully  half  the  counties.  As  a  rule  each  one 
was  prosperous  for  a  time,  but  failed,  as  a  correspondent 
writes,  ^'from  lack  of  mercantile  ability  on  the  part  of 
farmers  elected  as  boards  of  directors  and  managing  sales- 
men." 

For  some  ten  years  there  has  been  established  at  Chicago 
an  unambitious  but  useful  business  agency  of  the  State 
Grange.  The  agent — at  present  Mr.  Joseph  Chambers — is 
elected  by  the  State  Grange,  and  receives  a  salary  for  the 
work  done.  No  capital  is  invested  in  the  business.  Any 
local  grange,  or  any  granger  known  to  the  agency,  may 
order  any  sort  of  merchandise  through  Mr.  Chambers,  who 
merely  sends  the  orders  on  to  wholesale  houses  that  fill  them 
at  the  regular  rates,  the  grange  receiving  a  small  commis- 
sion, and  becoming  responsible  on  the  one  hand  to  the  pur- 
chaser for  a  good  quality  of  goods  and  proper  rates,  and  on 
the  other  hand  to  the  wholesale  dealer  for  prompt  payment 
in  cases  where  cash  does  not  accompany  the  order.  Farm 
products  may  also  be  consigned  to  tho  agency,  and  sold  at 
customary  commissions.  The  amount  of  goods  handled  in 
this  way  is  very  considerable,  but  the  business,  as  conducted, 
does  not  take  all  the  time  of  even  one  man.  There  are 
some  complaints  regarding  the  management  of  the  agency, 
but  what  foundation  they  may  have  it  is  not  easy  to  deter- 
mine. 

Missouri. — In  Missouri  there  seem  to  have   been    no 
features  worthy  of  special  notice  regarding  rural  cooperation. 

Kansas. — Here  we  find  examples  of  unusual  and  appar- 
ently permanent  success.     The  Johnston  County  Coopera- 


Patrons'  Cooperative  BanJc. 


385 


tive  Association,  which  is  doing  a  successful  business  at 
Olathe,  is  the  oldest  and  most  successful  of  these.  Its  pres- 
ent manager  is  H.  C.  Livermore.  The  prime  mover  in  the 
enterprise,  and  the  president  of  the  association  for  nearly 
ten  years,  was  the  Hon.  W.  H.  Toothaker,  the  Master  of 
the  Kansas  State  Grange,  and  a  man  of  national  reputation 
in  grange  work.'  The  Eochdale  plan  was  adopted  in  its 
purity,  and  the  association  began  business  in  July,  1876. 
The  following  table  gives  a  summary  of  the  business  done 
during  the  first  ten  years,  or  until  July,  1886  : 


YEABS. 


1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

Totals. 


Capital. 


$848  99 

3,816  60 

5,971  20 

7,540  90 

10,343  67 

17,673  78 

33,685  00 

36,879  87 

38,576  33 

40,916  83 


Annual  Sales,     Annual  Profits.. 


§41,598  86 
69,177  32 
92,808  85 
158,421  54 
189,175  84 
243,100  88 
266,070  15 
269,099  52 
252,995  78 
210,588  79 


11,793,037  53 


$1,500  29' 

2,149  69 

4,846  84 

10,775  54 

11,402  60- 

14,887  85. 

18,006  21 

15,305  12 

13,683  21 

104,038  41 


$196,595  7& 


Besides  the  profits  a  reserve  fund  has  also  been  set  aside 
for  building  purposes,  with  which  a  three-story  iron  and 
brick  building,  130  x  128  feet,  has  been  erected,  the  third 
floor  being  used  for  the  grange  meetings  and  as  an  audience 
hall.  The  building  is  supplied  with  steam  heaters,  an  ele- 
vator, etc.,  and  was  erected  at  a  cost  of  875,000.  "  Pros- 
pects are  very  bright." 

The  Patrons'  Cooperative  Bank,  of  the  same  place,  was 
undertaken  with  the  same  men  for  leaders  as  the  store.  It 
was  organized  June  7th,  1883.     The  capital  is  $75,000,  in 


^Most  of  the  facts  obtained   concerning  cooperation  in  Kansas 
were  gathered   and   systematized   for  me   by   Mr.  Toothaker,   to 
whose  helpful  courtesy  I  am  much  indebted. 
25 


386  Three  Phases  of  Cooperation  in  the  West. 

$100  shares,  no  man  to  hold  more  than  ten,  and  each  share- 
holder to  have  but  one  vote.  "  It  was  established,"  says 
Mr.  Toothaker,  "  principally  as  a  means  of  protecting  the 
people  from  losses  as  depositors,"  many  disastrous  failures  of 
banks  having  occurred.  The  present  stockholders  number 
about  two  hundred — farmers  with  visible  property  worth 
from  ten  to  one  hundred  thousand  dollars,  and  as  all  their 
personal  property  is,  by  the  law  of  the  state,  to  serve  as 
security,  there  seems  small  chance  for  loss  on  the  part  of 
depositors.  "  The  bank  has  paid  the  stockholders  a  semi- 
annual dividend  of  ten  per  cent."'  The  yearly  deposits 
amount  to  $1,000,000  and  the  exchange  to  over  8500,000. 
''There  are  some  twenty  or  thirty  smaller  cooperative 
stores  in  the  state,  which  need  not  be  described  in  detail." 
There  are  noticeably  successful  stores  at  Constant,  Cowley 
county;  McLooth,  Jefferson  county;  also  at  Cadmus,  Oak- 
wood,  Mound  City  and  Sj^ring  Hill. 

Nebraska. — In  1872  Nebraska  was  comparatively  new 
and  comparatively  far  from  the  places  where  any  desira- 
ble farm  machinery  was  then  manufactured.  Many  local 
granges  clubbed  their  orders  for  different  kinds  of  imple- 
ments, and  though  in  many  cases  the  result  was  satisfac- 
tory, yet  in  others  mere  cheapness  was  secured  at  the  ex- 
pense of  quality.  The  very  cheap  machinery  was  very  poor. 
A  style  of  harvesting  machine  known  as  the  header,  was 
then  much  used  over  all  the  newer  West,  and  continued 
popular  for  several  years,  till  supplanted,  together  with 
its  old-fashioned  competitors,  by  the  modern  self-binder. 
The  point  of  interest  for  our  present  purposes  is,  that  few 
heavy  or  complicated  castings  were  necesssary  in  the  con- 
struction of  these  machines,  and  there  were  few  parts,  ex- 
cept the  sickle-knives,  that  required  great  skill  for  their 
manufacture,  while  these  could  be  easily  purchased  in  quan- 


^I  am  not  sure  whether  Mr.  Toothaker  really  meant  a  twenty 
per  cent,  annual  dividend  or  not. 


Causes  of  Failure.  387 

tity.  The  standard  headers  were  selling  at  this  time  for 
from  $325  to  8300.  In  February  of  1872  the  State  Grange 
•appointed  an  agent  to  see  what  could  be  done  towards  the 
manufacturing  of  headers  in  Nebraska.  After  some  delay, 
arrangements  were  completed  with  parties  in  Fremont, 
which  warranted  the  erection  of  the  necessary  foundries 
and  shops,  and  headers  were  furnished  the  State  Grange  at 
a  net  cost  of  8150.  They  were  sold  to  farmers  at  that 
price,  cash  on  delivery,  and  no  loss  resulted.  As  a  con- 
sequence the  price  of  all  sorts  of  harvest  machinery  was 
reduced  over  the  whole  state,  railroads  gave  better  rates  on 
machinery  of  eastern  manufacture,  and  everything  seemed 
to  indicate  that  the  grange  had  made  a  wise  move.  But  a 
parallel  attempt  was  made  at  Plattsmouth  in  the  manufac- 
ture of  corn  cultivators,  and  in  this  case  about  twice  as 
many  were  manufactured  as  could  be  sold,  and  there  re- 
sulted a  net  loss  of  some  85,000  to  the  grange.  This, 
through  mismanagement,  was  connected  with  the  Fremont 
enterprise,  and  a  fine  lot  of  law-suits  was  the  result,  in 
the  progress  of  which  some  of  the  grange  officials  and  agents 
suffered  severe  and  unmerited  personal  loss.  These  disas- 
ters, together  with  a  severe  attack  of  politics,  killed  the 
grange  in  Nebraska,  nor  had  it,  until  recently,  shown  any 
indication  of  resurrection. 

Causes  of  Failure. 

The  causes  of  the  approximate  failure  of  cooperation 
among  farmers  in  the  district  under  consideration  have 
necessarily  been  outlined,  or  at  least  suggested,  in  the  fore- 
going historical  sketch.  They  may  be  summarized  under 
the  following  heads  : 

1.  Some  of  the  cooperative  enterprises  have  deservedly 
failed,  because,  even  with  proper  management,  they  could 
not  pay.  In  other  words,  there  are  conditions  under  which 
the  cooperative  is  demonstrably  inferior  to  the  distinctively 
competitive  organization  for  the  attainment  of  given  ob. 


388  Three  Phases  of  Cooperation  in  the  West. 

jects.  One  simple  example  may  be  given  of  an  industry 
that  has  so  changed  that  cooperation,  once  possible  and  ad- 
visable, is  now  inadvisable,  though  still  possible.  When 
threshing  machines  first  came  into  use  they  were  small  af- 
fairs, usually  run  by  one  or  two  horses  in  a  tread-mill  horse- 
power. Small  as  they  were,  each  machine  could  do  much 
more  than  thresh  the  crop  of  an  average  farmer,  and  so  it 
was  usual  for  several  farmers  to  combine,  buy  a  machine, 
thresh  their  own  crops,  do,  perhaps,  some  work  for  their 
neighbors,  and  divide  the  profits.  As  the  machines  were 
improved  and  enlarged,  it  became  more  and  more  difficult 
for  an  ordinary  farmer  to  operate  one  to  advantage.  The 
value  of  special  skill  and  aptitude  for  the  business  of  "run- 
ning a  thresher^'  increased  as  the  business  became  more 
technical,  for  each  mistake  delayed  or  wasted  the  labor 
of  an  increasing  number  of  men  and  teams.  Nor  did 
farmers  find  it  profitable  to  buy  machines  and  hire  expe- 
rienced men  to  run  them,  for  the  chances  of  wasting  time 
and  effort  were  so  numerous  that  experience  proved  that 
only  one  having  personal  interest  in  the  result  could  be 
relied  upon  to  do  the  best  possible  work.  With  the  advent 
of  the  present  steam  thresher,  having  a  thirty-six  inch 
cylinder  and  a  daily  capacity  that  would  formerly  have  been 
considered  fabulous,  the  change  is  complete,  and  threshing 
is  almost  universally  done  by  men  who  charge  a  given  rate 
per  bushel,  which  rate  is  fixed  by  the  law  of  supply  and 
demand.  Farmers  are  still  at  liberty  to  combine,  buy  ma- 
chinery and  do  their  own  threshing,  but  they  would  infalli- 
bly lose  money  by  doing  so.  Where  farms  are  small  much 
the  same  development  has  taken  place  regarding  harvesting 
machinery;  those  who  have  not  enough  grain  to  keep  a  ma- 
chine busy  during  the  season  usually  find  it  more  profitable 
to  hire  their  grain  cut  by  the  acre  than  to  own  part  of  a 
machine. 

Eeferring  to  the  failures  we  have  described,  we  may  then 
properly  ask  the  question  whether  or  not  a  given  enterprise 
failed  because,  as  an  industrial  undertaking,  it  was  inherently 


Caicses  of  Failure,  389 

unwise.  As  to  the  attempts  to  manufacture  farm  machinery 
I  think  this  may  be  said :  farmers,  as  such,  cannot  produce 
or  cause  to  be  produced,  machinery  as  reliable  and  cheap  as 
that  sent  out  from  the  works  managed  by  expert  machinists, 
whose  success  depends  entirely  upon  their  ''keej^ing  up  with 
the  times"  in  a  business  where  the  times  are  very  hard 
to  keep  up  with,  and  on  their  winning  a  reputation  for 
reliable  products.  It  may  be  well  enough  for  farmers  to 
start  such  enterprises  as  a  ready  means  of  bringing  manu- 
facturers to  just  terms;  indeed,  it  seems  that,  viewed  in 
this  light,  the  disastrous  enterprises  begun  in  Nebraska 
were  worth  far  more  to  the  farmers  of  the  state  than  they 
cost. 

2.  One  of  the  most  useless  causes  of  the  failure  of  cooper- 
ative companies,  and  a  potent  one,  has  been  the  lack  of 
proper  legislation,  making  impossible  the  incorporation  of 
true  cooperative  companies.  The  example  of  the  Cincinnati 
Grange  Supply  House  is  an  instance  in  point. 

The  mere  matter  of  voting  is  not  the  only  one  which 
needs  a  change  in  the  laws  to  secure  the  best  results,  and  in 
some  of  the  states  it  is  allowable  to  give  each  member  an 
equal  voice  in  the  management  of  affairs.  But  nothing 
definite  Avas  done  in  any  of  the  states  to  make  adequate 
legislative  provision  for  cooperative  companies,  though,  with 
the  English  and  the  eastern  models,  and  a  little  common 
sense,  it  ought  not  to  have  been  hard  to  draft  such  a  law;  and 
an  organization  strong  enough  to  pass  what  is  called  the 
"granger  legislation"  regarding  corporations  already  estab- 
lished, might  surely  have  had  it  enacted.  In  1884  a  bill 
passed  the  Ohio  legislature  providing  for  cooperative  associ- 
ations, but  it  consists  merely  of  the  title  and  a  considerable 
mass  of  legal  verbiage.  There  is  in  it  absolutely  nothing  of 
value  for  the  purpose  in  hand,  except  the  provision  that 
such  associations  shall  have  the  right  to  divide  profits  among 
patrons  m  proportion  to  purchases,  and  this  right  was 
granted,  or  could  be  derived  from  previous  acts  under  which, 
the  so-called  cooperative  associations  had  been  operating. 


390  Three  Phases  of  Cooperation  in  the  West. 

3.  A  third  cause  of  failure  may  be  stated  as  the  inadapta- 
tion  of  rural  life  and  character  to  the  cooperative  method  of 
managing  business.  We  may  include  under  this  head  indi- 
vidual isolation,  lack  of  business  experience,  and  the  fact 
that  farmers  are  in  a  position  to  take,  if  they  choose,  the 
most  agreeable  and  pleasant  way,  even  though  it  be  not  in 
the  end  the  most  profitable.  Mr.  Chambers,  of  the  Illinois 
Grange  Business  Agency,  says  that  farmers  are  too  rich  to 
succeed  in  cooperation.  Even  where  there  may  be  a  certain 
amount  of  profit  in  such  enterprises,  there  is  no  pressing 
necessity  to  urge  or  compel  them  to  take  advantage  of  it. 
They  are  in  a  position  to  gratify  their  whims  as  to  where  and 
what  to  buy,  and  do  so  even  at  some  cost  to  their  own  final 
interests.  As  the  first  cause  of  failure  given  in  this  sum- 
mary is  one  seldom  advanced  by  cooperators  or  ex-coopera- 
tors,  so,  on  the  other  hand,  the  one  at  present  under  con- 
sideration is  oftenest  given  in  reply  to  inquiries  as  to  the 
causes  of  failure.  The  inability  of  those  concerned  to  break 
away  from  the  habits  acquired  in  the  transaction  of  ordinary 
business,  and  their  willingness  to  be  led  astray  by  specious 
advertisements  and  the  seductions  of  the  temporarily  low 
prices  of  ^'cut-throat  competitors,^'  have  been  very  fruitful 
causes  of  disaster.  It  will  be  said,  perhaps,  that  short- 
sightedness is  the  cause  of  nearly  all  human  failures  of 
whatever  class,  but  still  it  is  especially  fatal  in  cooperative 
enterprises.  Those  who  engage  in  such  undertakings  are 
often  called  u^oon  to  forego  immediate  in  order  to  secure 
prospective  gains  ;  to  pay  always  a  fair  price  in  order  that 
they  may  avoid  the  necessity  of  ever  paying  more  than  is 
fair,  and  to  pay  cash  at  each  transaction  in  order  that  they 
need  never  be  compelled  to  pay  a  share  of  some  less  respon- 
sible person's  unsettled  accounts.  A  short-sighted,  imjoa- 
tient  person  will  not  persevere  in  the  doing  of  these  things, 
and  a  cooperative  company  made  up  of  any  considerable 
number  of  such  persons  will  be  sure  to  fail. 

Yet,  while  short-sightedness  and  the  isolated  lives  of 
farmers  are  causes  of  failure  in  cooperative  undertakings. 


Residual  Benefits.  391 

these  very  features  of  rural  life  should  serve  as  additional 
incentives  to  repeated  and  earnest  efforts  to  achieve  success. 
If  the  individuals  of  a  given  class  are  isolated,  so  much  the 
more  do  they  need  something  that  will  bring  them  together 
and  teach  them  to  understand  each  other,  so  that  at  need 
they  may  be  able  to  work  together  for  a  common  end;  if 
they  are  deficient  in  their  knowledge  of  affairs  outside  their 
own  peculiar  branch  of  industry  then  it  will  be  to  their 
advantage  to  acquire  such  knowledge,  even  if  they  have  to 
pay  pretty  liberally  for  the  experience  through  which  alone 
it  is  to  be  obtained. 

4.  Of  an  exactly  opposite  nature  to  the  foregoing  is  the 
influence  of  the  general  indebtedness  of  the  farming  class. 
This  has  been  a  potent  cause  of  the  failure  of  many  rural 
enterprises, 

5.  Wo  may  place  next  in  the  enumeration  of  the  causes  of 
failure  the  peculiarly  intense  hostility  of  the  regular  trades- 
men. This  hostility  was  more  general  and  vindictive  than 
would  have  been  felt  towards  the  same  number  of  ordinary 
enterprises,  because  the  cooperators  themselves  hastened  to 
declare  a  war  of  extermination  upon  ''middle-men,"  and  so 
the  latter  necessarily  entered  upon  the  struggle  as  upon  a 
struggle  for  existence. 

6.  Lastly,  there  were  a  great  many  local  causes  of  failure. 
Special  quarrels  and  jealousies  already  existing  or  soon 
developed,  or  other  adventitious  difficulties  brought  ship- 
wreck to  many  of  the  enterprises. 

Residual  Benefits. 

It  may  be  thouglit  that  we  are  very  near  the  end  of  tlie 
discussion  of  cooperation  among  farmers  when  we  have 
reached  the  point  where  it  is  proper  to  begin  the  enumera- 
tion of  the  benefits  resulting  from  the  attempts.  Though 
it  is  indeed  true  that  this  branch  of  the  subject  need  not 
detain  us  long,  yet  it  is  true,  not  so  much  because  the 
benefits  were  few  or  small,  as  because  they  were  of  a  sort 


392  Three  Phases  of  Cooperation  in  the  West. 

not  susceptible  of  definite  statement  and  enumeration.  An 
approximate  estimate  of  them  might  include  the  following 
items  : 

1.  The  educational  benefits  resulting  to  the  individual 
cooperators  may  first  be  noticed.  The  most  important  of 
these  is  not  the  slight  acquaintance  gained  by  some  with 
business  forms  and  methods,  but  rather  the  intimate  knowl- 
edge that  individuals  gained  of  their  own  incapacities  and 
those  of  their  fellows.  Practice  in  working  with  his  fellows 
is  the  most  useful  training  a  citizen  can  have,  and  this  the 
attempts  at  cooperation  afforded.  The  earlier  grangers 
were  told,  and  believed,  that  it  would  be  a  simple  matter 
for  them  to  manage  all  the  industrial  machinery  by  which 
they  were  in  any  wise  affected.  They  made  numerous 
experiments  to  test  the  feasibility  of  the  thing,  and  have 
been  more  modest  and  more  sensible  ever  since.  They  will 
hereafter  understand  better  the  power  and  the  real  value  of 
the  industrial  organization  of  the  present,  and  they  will 
better  understand  themselves.  Though  they  may  attempt 
less,  they  will  achieve  more. 

2.  We  have  already  noticed  in  certain  cases  the  good 
effects  resulting  from  attempted  cooperation  through  the 
medium  of  lower  rates  forced  upon  the  regular  dealers.  Co- 
operative enterprises  served  as  an  efficient  meansof  pricking 
the  bubble  of  high  prices  produced  by  monopoly,  or  really 
superfluous  middle-men.  The  strictly  competitive  system 
might  be  expected  to  perform  all  such  services  for  itself, 
but  in  practice  it  is  found  that  some  force  extraneous  to 
that  system  is  of  use  in  accomplishing  such  results. 

3.  The  habit  of  going  to  first  sources  for  supplies  has 
resulted  in  a  permanent  pruning  of  the  powers  of  local  deal- 
ers. Through  the  old  ^'business  agencies,"  relations  were 
established  with  wholesale  houses  which  continue,  even 
where  the  agencies  have  ceased  to  exist.  ''Shopping  by 
mail"  was  greatly  helped  towards  its  present  importance 
by  the  grange  movement,  and  is  still  carried  on  in  many 
cases  through  the  means  of  the  order. 


Residual  Benefits.  393 

4.  A  certain  amouut  of  absolute  success  has  been  acliieved, 
and  the  possibility  of  achieving  success  under  right  laws, 
and  with  good  management,  has  been  demonstrated. 

Thus,  though  the  proportion  of  failures  to  successes  has 
been  greater  in  this  section  than  in  any  other,  the  care- 
ful study  of  the  facts  need  not  discourage  us.  "Even  our 
failures  are  a  prophecy.' 


CHAPTER  11. 

COOPERATION  AMONG  WAGE-EARNERS. 

Cooperation  among  wage-earners  in  the  middle  west  is' 
as  yet  almost  wholly  tentative.  He  who  writes  of  it  must, 
for  the  most  part,  be  content  to  describe  hopes  and  to 
sketch  possibilities. 

In  estimating  the  general  possibilities  of  the  success  of  co- 
operative enterprises  as  such,  the  first  factor  to  be  considered 
is  the  way  in  which  such  enterprises  are  regarded  by  the 
laborers  themselves.  It  is  believed,  and  speaking  generally 
it  is  true,  that  the  enthusiasm  of  the  laboring  men  for  coop- 
eration surpasses  that  of  the  early  grangers;  the  need  of  the 
wage-earners  is  greater,  and  their  aims  are  more  radical. 
''Down  with  the  strike  (assistance)  fund  and  up  with  the 
cooperative  fund/'  says  the  Chicago  Knights  of  Labor,  and 
Avants  the  order  to  raise  $0,000,000  for  the  advancement  of 
the  "cause."  This  enthusiasm  is  so  vociferous  and  so 
much  talked  about  that  here  it  need  not  be  further  insisted 
on;  there  is,  however,  an  under-current  of  opposition,  which, 
though  not  specially  important  in  itself,  needs  noticing  be- 
cause it  is  usually  ignored.  This  opposition  is  that  of  cer- 
tain laborers — or,  j)erhaps,  some  would  think  it  more  accu- 
rate to  say  of  certain  labor  leaders — to  what  they  call  indi- 
vidual or  competitive  cooperation;  that  is  to  the  forma- 
tion of  individual  cooperative  companies  that  seek  to  fit 
themselves  into  the  ordinary  competitive  organization  of 
industry.  The  radical  wing  of  the  Socialists  is  an  existing 
force  that  should  be  reckoned  with.  Their  present  oppo- 
sition to  attempts  at  partial  cooperation  are  various,  and 
some  of  them  troublesome.  When  the  Denver  Labor  En- 
quirer, the  official  organ  of  the  '"lied  Internationals,'"'  de- 
clares against  profit-sharing,  it  does  so  on  purely  theoretical 
39i 


Co'OjMration  Among  Wage- Earners.  395- 

grounds.  But  a  most  conspicuous  example  of  practical 
opposition  is  to  be  found  in  the  action  of  the  International 
Working  People's  Association  in  Chicago,  relative  to  the 
proposed  cooperative  company  formed  by  the  packing-house 
strikers,  and  designed  to  operate  a  large  establishment  of  its 
own.  The  opposition  to  the  project  was  based  largely  upon 
the  ground  that  successful  cooperators  became  as  conserva- 
tive and  aristocratic  as  any  other  capitalists.  Morgan,  who 
opposed  the  plan  most  decidedly,  also  sketched  very  forcibly 
the  difficulties  attending  a  cooperative  enterprise  that  must 
compete  with  such  a  man  as  Armour,  and  urged  that  labor- 
ers could  have  no  real  power  till  all  industry  was  managed 
as  the  postoffice  now  is.  Until  that  time  came,  the  laborer 
should  get  as  much  as  possible  for  his  work,  and  help  for- 
ward the  agitation  for  the  complete  triumph  of  socialism. 
Whether  from  such  opjDOsition,  or  from  inherent  weakness, 
the  packing-house  scheme  came  to  nothing. 

Some  of  the  labor  papers  also  become  restive  under  the 
perpetual  reiteration  of  the  story  of  the  Eochdale  Pioneers, 
and  show  that  in  the  department  of  retail  trade  the  profits 
are  already  so  small  in  this  country  that  the  retailers  more 
resemble  hired  laborers  for  the  wholesale  houses  than  inv''e- 
pendent  tradesmen,  and  that  with  trade  so  organized  there 
is  no  place  for  distributive  cooperation.' 

No  one  can  doubt  the  need  of  such  a  warning  who  has 
looked  through  the  great  mass  of  self-complacent  theoriz- 
ing indulged  in  by  writers  for  the  labor  press.  But  aside 
from  the  theorists  who  hinder  by  oj)posing  and  the  theorists 
who  cripple  by  trying  unwisely  to  aid  the  movement  for 
cooperation,  the  fact  remains  that  the  great  majority  of 
organized  laborers  in  this  section  of  the  country  believe  in 
cooperation,  and  are  making  very  practical  and  very  vigor- 
ous efforts  to  help  forward  ''the  cause."  One  of  the  largest 
appropriations    made    by   the    General    Assembly    of    the 


^Professor  J.  B.  Clark,  in  his  recent  work,  The  Philosophy  of 
Wealth,  insists  upon  this  same  point,  p.  193. 


396  Th-ee  Phases  of  Cooperation  in  the  West. 

Knights  of  Labor,  at  its  meeting  at  Eichmond,  was  for 
the  purpose  of  furthering  practical  cooperation,  and  with 
the  help  of  the  hard  sense  and  great  experience  which  some 
of  the  leaders  possess,  we  may  hope  that  definite  results  of 
some  sort  may  ere  long  be  reached. 

In  their  declaration  of  principles  the  Knights  of  Labor 
declare  that  their  ultimate  object  is  to  introduce  a  "^coope- 
rative industrial  system,"  which  undoubtedly  many  of 
them  expect  to  become  universal  without  great  delay.  But 
their  leaders  are  too  shrewd,  and  have  learned  too  much  by 
their  experience  of  the  last  few  years,  to  expect  very  start- 
ling results  in  the  immediate  future.  "We  cannot  make 
men,"  says  Powderly,  sadly;  *'we  must  take  them  as  we 
find  them;"  and  one  of  the  most  difficult  features  of  the 
work  of  the  leaders  has  been  to  get  the  men  to  come  down 
to  practical  plans  and  begin  where  there  is  a  possibility  of 
beginning. 

McGaughey,  the  secretary  of  the  cooperative  board,  has  had 
a  chance  to  observe  all  the  operations  of  the  successful  coop- 
erative coopers,  elsewhere  described  by  Dr.  Shaw,  and  the 
study  of  the  self -helping  efforts  of  these  men  has  begot  in  him 
a  rather  lively  impatience  with  the  frequent  calls  for  assist- 
ance made  by  various  local  assemblies.  A  published  letter 
of  his  says  that  the  cooperative  board  desire  to  learn  of  all 
cooperative  efforts,  and  especially  to  receive  copies  of  their 
by-laws  and  constitutions,  but  that  the  board  does  not  want 
any  more  applications  for  aid  from  cooperative  enterprises. 
"This  thing  of  expecting  help  in  starting  a  carp-pond,  a 
dairy  or  a  machine  shop  is  a  great  mistake."  Then  going 
on  in  an  exclamatory  and  despairing  mood,  he  cries  :  **  Give 
us  a  rest  ill  the  name  of  brotherhood  and  human  charity  ! 
If  your  plans  are  feasible  the  best  place  to  look  for  help 
must  be  near  home."  Mr.  Samuel,  another  member  of  the 
board,  trying  to  meet  the  demand  for  definite  plans  of  co- 
operation fitted  to  existing  circumstances,  prepared  a  pam- 
phlet of  twenty  pages  on  "How  to  Organize  Cooperative 
Societies."     This  pamphlet  gives  the  fundamental  maxims 


Cooperation  Among  Wage-Earners.  397 

that  have  been  followed  by  nearly  all  successful  cooperators, 
a  model  for  the  constitution  and  by-laws  of  a  cooperative 
society,  and  a  few  pages  of  reasons  why  a  laboring  man 
should  become  a  cooperator.  The  price  of  this  little  work 
is  only  five  cents,  and  though  it  was  published  in  188G,  it 
has  circulated  widely  among  the  Knights,  and  has  already 
exerted  considerable  influence  in  shaping  the  policy  of  the 
various  new  societies  springing  up  in  various  parts  of  the 
country. 

Before  taking  up  the  individual  enterprises,  one  more 
characteristic  of  the  attitude  of  certain  laborers  should  be 
pointed  out.  The  feeling  alluded  to  is  that  of  dread  of  the 
present  competitive  organization  as  of  something  tangible 
and  objective,  which  is  able  to  seize  and  injure  them.  Of 
course,  this  feeling  is  not  widespread,  but  that  it  should 
exist  at  all  in  this  country  will  bo  a  matter  of  surprise  to 
some.  It  is  almost  exactly  analagous  to  the  fear  which  an 
oppressed  citizen  might  have  of  a  tyrannical  government. 
I  know  of  cooperative  stores,  the  managers  of  which  keep 
everything  as  secret  as  possible,  and  where  the  deliberations 
of  the  stockholders  are  carried  on  with  many  of  the  precau- 
tions that  conspirators,  planning  the  assassination  of  a 
tyrant,  might  employ.  In  Michigan  there  is  a  small  coopera- 
tive store,  the  very  existence  of  which  is  kept  secret,  and  I 
was  confidentially  informed  of  its  whereabouts  only  on  con- 
dition that  none  of  the  facts  concerning  it  should  be  made 
public. 

At  the  close  of  his  pamphlet  on  "How  to  Organize 
Cooperative  Societies,"  Mr.  Samuel  gives  five  reasons  for 
being  a  cooperator,  and  the  last  of  these  affords  as  good  a 
summary  as  we  need  seek  of  the  way  in  which  this  subject 
is  regarded  by  the  great  majority  of  workingmen  who  both 
think  and  hope.  The  essential  parts  of  the  passage  referred 
to  are  these  : 

"  Cooperation  is  the  only  way  that  I  see  by  which  the  workers 
in  this  land,  or  any  other,  can  raise  their  position  to  what  it  ought 
to  be  and  might  be.     Hundreds  and   thousands  of  persons  have 


398  Three  Phases  of  Cooperation  in  the  West. 

'got  on,'  as  it's  called,  by  getting  on  the  backs  of  the  workers. 
They  have  rolled  up  capital  out  of  profits  on  their  work  and  their 
trade.  Now,  cannot  the  workers  get  themselves,  as  a  body;  'on' 
to  a  higher  standing  ground  ?  Cannot  they  roll  up  capital  out  of 
their  own  purchases  and  their  own  work  to  lift  themselves  up,  one 
and  all  ?  I  believe  they  can.  But  how?  By  union  among  them- 
selves for  this  great  end — the  greatest  end,  I  think,  that  men  have 
ever  knowingly  worked  for.  Now,  where  does  the  road  to  this  end 
begin?  Where  else  but  in  the  store — which  can  give  them  capital 
out  of  their  own  income;  which  gives  them  business  habits;  which 
enables  them  to  combine  their  power  by  great  commercial  institu- 
tions, such  as  the  cooperative  wholesale  societies,  and  active  cen- 
ters for  propaganda,  conferences,  congresses,  central  and  sectional 
boards,  at  once  creating  strength  and  showing  them  how  to  use  it  to 
best  advantage  and  for  the  noblest  purposes." 

Integral  Cooperation. 

Those  wlio  liave  become  acquainted  with  any  considerable 
number  of  attempts  at  cooperation  must  have  felt  at  times 
that  Wolsey's  injunction,  "I  charge  thee,  fling  away  ambi- 
tion,^' is  of  special  applicability  to  cooperators.  "  The 
great  fault  with  too  many  cooperators,"  said  Powderly  in 
1885,  ''is  that  they  advocate  the  establishment  of  coopera- 
tive institutions  on  too  large  a  scale." 

The  Knights  of  Labor  announce  that  they  are  working 
towards  universal  cooperation,  but  this  is  said  by  men  who 
(most  of  them)  realize  keenly  how  distant  is  the  goal  that 
they  are  striving  toward.  Yet  there  are  others,  within 
and  without  the  order,  that  refuse  to  see  the  difficulties,  and 
who  insist  on  believing  in  an  imminent  millenium. 

The  most  radical  of  those  who  have  practically  attempted 
to  realize  such  ideals  believe  in  ''integral  cooperation." 
The  end  sought  through  this  form  of  organization  is  really 
a  state  of  pure  socialism,  with  socialized  capital  and  reward 
proportioned  to  services.  An  enterprise  of  the  kind  was 
organized  by  Henry  E.  Sharpe  in  January  of  1880,  and  was 
called  the  York  Society  of  Integral  Cooperators.  I  have 
obtained  no  detailed  account  of  the  society  during  the 
period  immediately  following  its  origin,  but  in  1882  there 


Integral  Cooperation.  399 

were  about  sixty  members,  some  of  wliom  were  already 
located  on  a  farm  of  one  thousand  acres  near  Eglinton,  in 
the  southwestern  part  of  Missouri. 

The  object  of  those  interested  was  declared  to  be  ''to  form 
an  absolutely  independent  community,  not  communistic, 
but  with  the  motto :  '  Equal  opjjortunity,  but  reward  pro- 
portioned to  deed. ' ' '  Capital  was  borrowed  upon  which  a 
fixed  interest  was  paid,  but  the  intention  was  that  all  capital 
should  ultimately  be  socialized.  The  members  of  the  colony 
entered  Local  Assembly  2776  of  the  Knights  of  Labor,  and 
Sharpe,  the  originator  and  propagandist  of  the  enterprise, 
was  made  chairman  of  the  cooperative  board  of  the  order. 
In  this  capacity  he  travelled  about  lecturing  on  cooperation 
for  the  edification  of  the  Knights  and  others.  After 
picturing,  in  the  way  that  was  then  becoming,  and 
has  since  become  so  common,  the  existing  miseries  of 
the  *'wage  slave,'^  his  first  point  was  to  show  that 
under  the  present  organization  of  industry  no  betterment 
was  possible.  He  followed  this  alleged  demonstration  by 
the  dogmatic  assertion  that  cooperation,  as  tried  in  England, 
had  failed,  and  that  the  various  schemes  of  industrial  part- 
nership had  failed.  He  next  claimed  that  neither  j^roduc- 
tive  cooperation  nor  competitive  distributive  cooperation 
would  make  its  way  unaided.  The  one  solution  of  the 
problem  was  the  union  of  these  two,  or  integral  coopera- 
tion. ''  Do  not  produce  to  sell,  do  not  buy  to  consume. 
Be  independent  of  capital,  independent  of  markets  and  of 
the  price  of  labor.     Work  for  yourselves." 

But  though  the  Knights  were  anxious  to  undertake  coop- 
erative enterprises,  and  though  their  chairman  of  tlie  coop- 
erative board  was  very  sure  he  knew  the  proper  method  of 
going  about  the  work,  yet  he  was  not  destined  to  be  the 
Moses  that  was  to  lead  them  out  of  the  Egypt  of  wage- 
bondage.  For,  while,  by  means  of  his  lectures  in  the  large 
cities,  he  was  in  some  measure  carrying  the  war  into  the 
enemy's  country,  the  model  colony  at  Eglinton  was  in 
revolt  behind  him. 


400  Three  Phases  of  Cooperation  in  the  West. 

In  the  final  report  of  the  Executive  Board  to  the  General 
Assembly,  the  following  causes  were  assigned  for  the  failure: 
(1)  City  people  cannot  succeed  in  agriculture  at  once;  (2) 
Want  of  individual  incentive  to  exertion;  (3)  Want  of 
means  to  discipline  or  to  expel  refractory  members;  (4)  No 
way  of  restraining  members  in  case  of  a  panic;  (5)  The 
smallness  of  the  scale  on  which  the  experiment  was  tried. 
The  same  circumstance  also  made  it  impossible  to  give 
opportunity  for  the  development  of  individual  capacity. 
The  Executive  Board  formulated  in  their  report  the  more 
obvious  of  the  lessons  which  the  Eglinton  experiment  seemed 
to  teach  :  ''(1)  Men  cannot  change  at  once  from  the  condi- 
tion of  wage-service  to  the  higher  level  of  cooperation.  Man 
for  a  long  time  yet  must  have  before  his  mind  the  fear  of 
being  stricken  from  the  pay-roll.  (2)  Individual  incentives 
to  exertion  must  be  provided.  (3)  Executive  officers  must 
have  power  to  discipline,  subject  always  to  appeal.  (4) 
Executive  officers  must  have  ample  authority  to  select  the 
men  best  adapted  to  the  work  in  hand."  This  preeminently 
sensible  report  was  submitted  to  the  General  Assembly  of 
the  Knights  of  Labor  at  its  meeting  in  1884.  The  lessons 
then  learned  the  managers  of  the  order  seem  not  to  have 
forgotten,  for  this  was  the  last  time  that  they  officially 
countenanced  any  scheme  for  immediate  integral  coopera- 
tion. Thenceforth  they  lent  the  whole  force  of  their  influ- 
ence to  more  modest  but  more  feasible  plans. 

Yet  many  individuals  in  the  order  have  looked  in  the 
same  direction  for  the  coming  of  industrial  salvation.  A 
friend  in  Cincinnati  has  sent  me  a  copy  of  a  book  published 
at  St.  Louis  by  the  author  and  designed  to  circulate  chiefly 
among  the  Knights  of  Labor.  On  the  upper  cover  are 
stamped  the  words  :  "  The  Key  of  Industrial  Cooperative 
Government,  by  Pruning  Knife."  On  the  other  cover  is  a 
picture  which  represents  a  hand  throwing  open  the  portals 
of  "Equity,^'  through  which  may  be  seen  a  very  small  lamb 
resting  lovingly  by  the  side  of  a  very  large  and  very  benig- 
nant lion.     The  book  is  written  in  doggerel  poetry,  inter- 


Integral  Cooperation.  401 

spersed  with  that  style  of  composition  wliich  is  said  to  joos- 
sess  neither  rhyme  nor  reason,  and  is  illustrated  from 
drawings  by  the  author  himself.  As  an  all-sufficient  ex- 
ample of  his  economic,  poetic  and  grammatical  attainments, 
one  verse  may  be  given  of  his  description  of  the  ideal  indus- 
trial organization: 

"In  lieu  of  greedy  profits  made  by  us, 
Industrial  bureaus  on  each  other  draw 

For  all  the  products  without  least  of  fuss  ; 
With  great  dispatch,  a  system  without  flaw." 

Even  Mr.  John  Samuel,  whose  pamphlet  was  mentioned 
above,  sketches  the  ultimate  aims  of  cooperators  as  includ- 
ing a  system  that  corresponds  to  Sharpe's  integral  coope- 
ration. Section  two,  of  a  model  constitution  for  a  coope- 
rative society,  drawn  up  by  him,  is  as  follows: 

"The  object  of  this  society  is  to  elevate  the  intellectual,  moral 
and  financial  condition  of  its  members,  through  cooperative  effort, 
and  in  accordance  with  the  following  plans  and  arrangements  :• 

1.  "The  establishment  of  a  store  to  conduct  the  business  of  gen- 
eral dealers,  wholesale  and  retail,  in  food,  clothing  and  other  com- 
modities ;  and  to  manufacture  the  same  whenever  practicable,  or 
when  necessary  for  the  employment  of  such  members  as  may  be 
suffering  from  an  undue  reduction  of  wages. 

2.  "  The  buying  and  holding  of  land,  and  the  erection  of  build- 
ings thereon  for  the  use  of  the  society. 

o.  "To  elevate  the  domestic  condition  of  its  members  by  buying 
or  building  suitable  homes  for  such  as  may  need. 

4.  "The  purchase  or  rental  of  lands  or  landed  estates,  to  be  cul- 
tivated by  members  who  are  out  of  employment,  or  who  may  suffer 
from  poor  wages. 

5.  "And  to  proceed,  as  soon  as  practicable,  to  the  establishment 
of  a  self-supporting  home  colony,  or  to  assist  other  societies  in 
establishing  sucli  colonies,  wherein  may  be  exemplified  in  a  practi- 
cal way  the  codperative  idea  of  production,  distribution,  education 
and  government." 


'How  to  Org.  Coop.  So.,  p.  0. 
20 


402  Three  Phases  of  Cooperation  in  the  West. 

Distributive  Enterprises.^ 

Of  the  distributive  enterprises  managed  distinctively  by 
wage- workers,  I  know  of  none  established  earlier  than  1881. 
A  vast  swarm  of  them  are  at  present  coming  into  existence, 
or  trying  to.  Of  the  whole  number  I  have  obtained  more 
or  less  definite  information  regarding  something  over  thirty. 
As  many  of  their  brief  histories,  in  so  far  as  they  have  his- 
tories, are  of  small  value,  I  prefer  to  speak  at  length  of  but 
four  of  them,  and  pass  by  the  others  with  nothing  more 
than  possible  mention.  Some  of  the  most  important  enter- 
prises may  not  be  known  to  me  at  all.  Modest  undertak- 
ings, as  before  stated,  are  apt  to  be  the  most  successful, 
and  these  will  often  be  overlooked,  even  by  one  svho  appre- 
ciates the  need  of  seeking  for  them. 

CooPEKATivE  Association  No,  1. — The  following  cir- 
cular was  issued  early  in  January  in  1886: 

^'Cooperative  Fair;  Fannie  Allyn,  L.  A.  4457,  Cincinnati,  Ohio. 

"Believing  that  our  only  salvation  lies  in  cooperation,  and  that 
being  one  of  the  leading  principles  of  our  noble  order,  we  therefore, 
having  full  confidence  in  each  other,  make  a  bold  attempt  in  form- 
ing a  cooperative  concern. 

'Prof.  Clark  says  that  "only  by  a  strange  perversity  of  nomen- 
clature "  can  this  form  of  cooperation  be  called  distributive.  "It 
is  productive  in  as  complete  a  sense  as  the  spinning  of  wool  or  the 
raising  of  sheep.  *  *  The  process  is  complex,  and,  in  reality, 
is  only  quasi  cooperative.  It  may,  perhaps,  be  termed  mixed  co- 
operation, since  the  essential  peculiarity  of  it  is  that  men  who  are 
employes  in  one  industry  become  proprietors  in  another."  (Ph. 
of  W.,  pp.  191-2.)  In  the  sense  in  which  Prof.  Clark  uses  distribu- 
tion, as  an  economic  term,  his  exception  is  well  taken,  but  the  word 
leads  to  less  practical  ambiguity  than  the  one  he  would  substitute 
for  it,  nor  does  the  word  he  suggests  seem  more  logical  than  the 
other.  It  does  not  aflfect  the  nature  of  an  enterprise  that  those  en- 
gaged in  it  are  engaged  in  another  capacity  in  other  enterprises  ; 
its  character  would  be  the  same  whether  those  connected  with  it 
were,  in  other  branches  of  industry,  all  employes,  or  all  capitalists. 
"  Consumptive  cooperation  "  is  another  remarkable  name  that  has 
been  used  lately  to  describe  the  work  of  these  "consumers'  unions," 
but  the  usual  term  will  be  employed  in  this  paper. 


Distributive  Enterprises.  403 

"  L.  A.  4457  has  announced  that  a  fair  is  to  be  held  at  K.  of  L. 
Hall,  southeast  corner  of  Abigail  and  Main  streets,  for  said  pur- 
pose, commencing  March  21st,  ending  March  28th. 

"  We  would  like  all  co5perative  concerns  to  correspond  M'ith  us, 
and  give  statements  of  articles  manufactured  and  prices  therefor. 
We  will  be  thankful  for  any  information  of  the  above  description, 
as  we  are  anxious  to  exhibit  all  K.  of  L.  goods  manufactured  or 
made  by  members  of  the  order. 

"  We  have  enclosed  tickets  for  various  articles  to  be  raffled  for  at 
said  fair,  and  we  hope  the  Assembly  will  use  its  influence  in  the 
disposal  of  the  same. 

"All  articles  raffled  off  will  be  made  public  through  the  Journal 
and  the  labor  papers  of  the  country. 

"  All  remittances  to  be  made  by  March  15. 

C.  Fannie  Allyn, 
Geo.  C.  Kuechler, 
Miss  Mary  Healy, 

Fair  Committee. ^^ 

The  moving  spirit  was  George  C.  Kuechler,  a  young  man 
of  twenty-one,  a  shoe-cutter  by  trade,  and  one  having 
plenty  of  time  to  attend  to  the  matter,  because  out  of  work. 
It  was  thought  by  some  that  he  had  been  * 'victimized," 
that  is,  found  it  hard  to  get  work  because  he  had  made  him- 
self too  prominent  in  forwarding  the  work  of  organizing 
the  Knights  of  Labor.  Of  tlie  eighteen  members  of  the 
assembly  twelve  were  ladies.  Two  of  the  men  had  been 
interested  in  cooperative  enterprises  before — one  under  the 
Sovereigns  of  Industry,  and  the  other  in  one  of  the  great 
societies  of  Manchester,  England. 

Copies  of  the  circular  were  sent  all  over  the  country,  and 
extended  notices  of  the  fair  appeared  in  many  of  the  labor 
papers  in  distant  places.  It  was  the  first  enterprise  of  the 
kind  in  America,  and  much  was  hoped  from  it.  Nearly  all 
the  cooperative  concerns  of  the  country  sent  exhibits,  and 
the  friends  of  the  order  were  liberal  in  their  donations  of 
things  to  serve  as  prizes  in  the  raffle.  The  Dueber  Watch 
Case  Company,  which  had  just  come  to  terms  with  the 
Knights,  and  been  released  from  a  long  and  effective  boy- 
cott, was  especially  generous.     In  a  "business  circular,'' 


404  Three  Pha.^es  of  Co7iperation  in  the  West. 

issued  after  the  close  of  the  fair,  tlie  managers  returned 
thanks  for  the  effective  support  accorded  them,  and  also  did 
what  they  could  to  extend  a  knowledge  of  the  enterprises 
represented.  Among  the  most  i)rominent  of  the  exhibitors 
were  the  following,  most  of  which  are  still  thriving  and 
prosperous  enterprises  :  The  Richmond  Cooperative  Com- 
mercial and  Manufacturing  )Soap  Company,  of  Eichmond, 
Va. ;  the  Ohio  Valley  Cooperative  Pottery  Company,  of  Til- 
tonville,  Ohio;  the  Quaker  City  Cooperative  Carjoet  Com- 
pany, of  Pliiladelphia,  Pa. ;  the  Canmakers'  Mutual  Protec- 
tive Association,  of  Baltimore,  Md.;  the  Cooperative  Morocco 
Manufacturing  Company,  of  Philadelpliia,  Pa.;  the  Ken- 
tucky Railroad  Cooperative  Tobacco  Company  (now  the 
Knights  of  Labor  Cooperative  Association),  of  Covington, 
Ky. ;  the  N"ational  K.  of  L.  Cooperative  Smoking  Tobacco 
Company,  of  Ralcigli,  X.  C;  the  Cooperative  Corn-cob  Pipe 
and  Novelty  Works,  of  St.  Charles,  Mo. ;  the  Cooperative 
Hat  Company,  of  South  Norwalk,  Conn.;  and  of  the  coop- 
erative cooper  shops  of  Minneapolis,  the  Phoenix,  North- 
western, North  Star,  Hennepin  and  Minneapolis  sent  exhib- 
its. The  barrels  sent  by  these  companies  were  made  of 
select  staves  and  hoops,  elaborately  painted  and  varnished, 
and  the  Pillsbury  Milling  Company  had  filled  them  gratis 
with  "Pillsbury's  Best.'' 

The  result  of  the  fair  was  to  put  the  cooperative  enter- 
prise on  a  sound  financial  basis,  and  to  give  cooperators  in 
different  parts  of  the  country  a  better  appreciation  of  each 
other's  work.  It  shows  the  feasibility  of  such  exhibitions 
with  our  present  facilities  for  inter-conimunication,  and 
affords  an  earnest  of  the  value  that  might  be  derived  from 
them.  Their  value  would,  of  course,  be  increased  if  they 
Avere  managed  not  by  one  concern  primarily  for  its  own 
profit,  but  by  a  committee  of  the  exhibitors,  or  by  some 
central  organization.  A  directory  of  cooperative  concerns, 
which  has  been  advocated  in  the  General  Assembly  of 
iinights,  would  then  be  not  difficult  to  make. 

After  the  fair  the  Fannie  Allyn   Cooperative  Association 


Distributive  Enterjrrises.  405 

changed  its  name  to  tlie  K.  of  L.  Cooperative  Association 
No.  1,  of  Cincinnati,  and  on  the  first  of  May  business  was 
regularly  begun.  They  were  able,  from  the  accumulated 
dues,  initiation  fees  and  proceeds  of  the  fair,  to  buy  a  stock 
of  goods  worth  five  hundred  and  four  dollars,  and  had  a 
reserve  fund  of  over  one  hundred  and  fifty  dollars. 

The  association  rented  two  rooms  at  the  rear  of  555  Main 
street,  and  as  one  of  them  was  used  by  a  K.  of  L.  assembly, 
the  rent  which  the  store  had  to  bear  was  only  three  dollars 
and  fifty  cents  per  month.  The  business  hours  were  from 
7  to  10  P.  M.,  and  as  the  managers  consented  to  serve  with- 
out pay  for  the  first  quarter,  and  be  in  the  store  during  the 
evening  in  turn,  there  were  almost  no  expenses  at  all.  It 
was  a  strangely  constructed,  non-legal  association,  and  how 
it  could  live  for  any  length  of  time,  and  especially  how  it 
could  outlive  a  quarrel  among  the  members,  seems  strange, 
yet  the  K.  of  L.  Cooperative  Association  No.  1  contrived  to 
do  both  these  things.  Kuechler  is  no  longer  connected 
with  it,  but  its  affairs  seem  to  prosper.  Business  increased 
rapidly,  and  a  dividend  of  thirteen  per  cent,  on  purchases 
was  declared  at  the  end  of  the  first  quarter.  A  lady  was 
employed  to  attend  to  business  during  the  day.  A  letter 
bearing  date  the  13th  of  January,  1887,  informs  me  that  the 
establishment  has  removed  to  a  three-story  building  at  62 
Thirteenth  street.  I  am  not  certain  whether  or  not  radical 
changes  have  been  made  in  the  plan  of  organization,  but  a 
quarrel  with  the  District  Assembly  has  at  least  compelled 
them  to  drop  the  letters  ""'K.  of  L."  from  their  title. 

Natioxal  Cooperative  Guild. — This  is  another  rather 
anomolous  enterprise  that  has  sprung  up  in  Cincinnati, 
under  the  management  of  Mr.  Kuechler,  who  was  concerned 
with  the  fair  and  with  the  Association  No.  1.  It  might  as 
well  be  classed  with  the  productive  enterprises,  for  it  is  a 
wholesale  house,  having  for  its  chief  object  the  finding  of  a 
market  for  goods  produced  by  cooperative  companies. 

The  capital  is  very  small,  but  the  association  does  a  sort 
of  commission  business  for  some  ten  cooperative  enterprises. 


406  Three  Phases  of  Cooperation  in  the  West. 

That  a  wholesale  house  can  profitably  handle  miscel- 
laneous merchandise  is,  of  course,  improbable.  Because  a 
certain  brand  of  cigars,  a  particular  kind  of  baking  powder 
and  a  given  sort  of  brooms,  or  soap,  or  cooking  stoves,  have 
all  been  produced  in  establishments  having  certain  coopera- 
tive features  in  their  management,  seems  to  be  no  excuse  for 
lumping  them  together  in  the  store-room  of  a  single  whole- 
sale dealer.  One  of  the  most  difficult  problems  for  some  of 
the  CO  perative  companies  has  been  found  to  be  the  securing 
of  a  market.  In  a  business  requiring  as  much  shrewd 
advertising  as  the  sale  of  manufactured  tobacco,  this  is 
especially  true,  but  it  hardly  seems  that  the  proper  method 
has  been  found  in  this  "distributing  association."  The 
producing  companies  will  find  it  easier  to  force  their  way  into 
the  ordinary  avenues  of  trade  by  the  regular  means  than 
by  dealing  with  such  a  gratuitous  ''middleman"  as  this 
company.  Kuechler  is  himself  a  good  salesman  for  some 
sorts  of  trade,  and  it  appears  that  it  is  only  through  his 
energetic  efforts  as  a  sort  of  travelling  man  for  the  various 
concerns  whose  goods  the  Guild  is  handling  that  anything 
at  all  has  been  accomplished. 

The  Streator  Cooperative  Supply  Store. — This 
enterprise  has  been  in  operation  but  little  over  a  year,  yet 
has  met  with  such  immediate  and  pronounced  success  as  to 
have  attracted  the  attention  of  the  wage-earners  in  many 
parts  of  the  "West.  Accounts  of  it  have  appeared  in  many 
of  the  labor  papers,  and  the  company  has  been  flooded  with 
requests  for  copies  of  the  constitution.  The  president  of 
the  company,  and  the  person  to  whom  it  owes  its  origin,  is 
Mr.  John  H.  Shay,  state  lecturer  of  the  Knights  of  Labor 
for  the  department  of  Illinois,  and  chairman  of  the  State 
Cooperative  Board.  The  store  is  the  outcome  of  a  series  of 
meetings  held  in  the  public  park  of  Streator  on  the  Sabbath 
day  under  the  auspices  of  the  Knights,  and  addressed  by 
Shay  and  others,  "on  the  subjects  of  organization,  educa- 
tion, cooperation,  industrial  partnership,  and  the  ballot.'*' 


Distributive  £!nterprises.  407 

It  originated  among  wage-workers  and  the  stock  is  owned 
by  that  class,  but  much  of  it  is  held  by  persons  who  are  not 
members  of  the  Knights  of  Labor,  nor  has  any  attempt  been 
made  to  prevent  other  classes  from  purchasing  stock.  Every 
effort  has  been  made  not  to  antagonize  other  dealers,  and  so 
favorably  is  the  enterprise  regarded  by  those  merchants  who 
do  not  come  in  competition  with  the  store,  that  when  the 
by-laws  and  constitution  were  published  a  few  extra  pages 
were  filled  with  advertisements,  and  these  more  than  paid 
for  the  cost  of  printing  the  whole. 

The  capital  stock  of  the  company  is  five  thousand  dollars, 
in  shares  of  ten  dollars  each.  No  person  is  allowed  to  hold 
more  than  five  shares,  "and  it  shall  be  the  duty  of  the  board 
of  the  directors,  as  rapidly  as  may  be  practicable,  to  assign 
the  shares  in  excess  of  one,  which  any  member  may  hold, 
to  those  who  may  afterwards  apply  for  membership. ' ' 

After  making  provision  for  payment  of  interest,  twenty 
per  cent,  of  the  remaining  net  profits  is  set  aside  for  the 
reserve  fund,  and  the  remainder  is  divided  among  share- 
holders in  proportion  to  purchases.  Non-shareholding 
patrons  receive  no  dividends,  as  it  is  thought  that  with  such 
a  rule  the  competing  stores  can  have  less  cause  for  complaint. 

The  business  motto  of  the  concern  is  ''cash,  current  rates 
and  dividends,"  but  credit  is  allowed  for  thirty  days,  in 
cases  of  emergency,  to  three-fifths  the  value  of  a  member's 
paid-up  stock.  No  amendment  to  the  constitution  shall 
ever  be  entertained  to  allow  a  member  more  than  one  vote, 
"except  in  the  election  of  directors,  when  the  vote  shall 
conform  to  tlie  laws  of  the  state." 

The  Laramie  Cooperative  Association  and  Others. 
— This  association,  located  at  Laramie,  Wyoming,  is  also  of 
importance  as  having  been  the  model  for  a  goodly  number 
of  similar  enterprises.  Judged  by  the  rules  that  have  been 
found  wisest  for  such  undertakings  in  other  places,  its  con- 
stitution and  by-laws  contain  several  regulations  that  seem 
injudicious;  but  a  prosperous  career  of  over  five  years,  the 


408  Three  Phases  of  Cooperation  in  the  West. 

present  flourishing  condition  of  the  company,  and  the  fact 
that  it  is  becoming  more  thoroughly  cooperative  as  it  gets 
older,  remind  us  that  we  must  not  jump  at  conclusions. 

The  company  was  incorporated  December  21st,  1881.  The 
capital  was  limited  to  $30,000  by  the  articles  of  incorpora- 
tion in  shares  of  five  dollars  each;  stock  is  not  assessable. 
There  were  nine  shareholders  Avho  subscribed  for  one  hun- 
dred and  fifteen  shares  of  stock,  twenty  shares  being  the 
most  that  was  held  by  any  one  person,  and  five  shares  the 
least.  Xo  limit  was  fixed  for  the  amount  of  stock  which 
one  man  could  own,  but  each  member  is  allowed  but  one 
vote,  and  no  proxies  are  allowed.  Credit  is  allowed  with  a 
thirty  days'  limit,  and  no  ''member  indebted  to  the  associa- 
tion two  days  previous  to  any  meeting  shall  be  entitled  to 
vote.'  "Profits  shall  be  divided  as  follows:  (1)  After 
deducting  all  expenses,  interest,  at  the  rate  of  twelve  per 
cent,  shall  be  paid  on  share  capital,  {'i)  Members  shall 
receive  the  full  dividend  on  cash  purchases — one-half  the 
dividend  to  members  taking  not  more  than  thirty  days' 
credit  for  their  purchases,  and  one-half  the  dividend  to 
known  non-members  on  their  cash  purchases."  Just  what 
this  section  provides  I  am  unable  to  decide.  Practically  it 
has  made  but  little  difference,  as  no  dividends  have  been 
declared  at  all,  but  the  surplus  above  the  twelve  jier  cent, 
interest  has  been  allowed  to  accumulate  as  a  reserve  fund, 
which  now  amounts  to  more  than  810,000.  Beginning  with 
December  1st,  1886,  the  company  proposes  to  declare  divi- 
dends "in  order  to  stoj)  the  continual  increase  in  the  value 
of  shares." 

The  seventh  semi-annual  statement  is  as  follows  : 

Goods  to  the  amount  of $18,073  91 

Fixed  stock  to  the  amount  of 959  90 

Real  estate  to  the  amount  of 11,700  00 

Open  accounts  to  the  amount  of 10,868  13 

Notes  in  our  favor  to  the  amount  of 2,558  50 

Money  in  safe  December  1  to  the  amount  of         166  50 

Total  assets $44,.326  94 


Productive  Cooperation.  409 

Amount  of  capital  stock  taken  to  date $7,S20  00 

The  corporation  is  worth  to-day,  independ- 
ently of  all  debts  and  capital  stock 10,131  09 

Total  -worth  of  Association §17,951  09 

This  instance  of  success  at  the  far  west  shows  that  even 
in  a  new  country  cooperation  may  be  employed  to  advantage, 
for  where  rates  of  interest  and  wages  are  liigh,  profits  are 
also  high.  The  influence  of  the  example  of  the  Laramie 
Cooperative  Association  can  be  directly  traced  in  the  estab- 
lishment of  some  half-dozen  enterprises  of  a  similar  nature, 
all  at  the  West.  Two  of  these  are  in  Wyoming,  one  at 
Evanston  and  another  at  Carbon;  one  at  Eagle  Rock,  Idalio; 
another  at  Denver,  Colorado;  and  two  in  Kansas,  one  at 
Ellis,  the  other  at  Leavenworth;  still  another  is  talked  of  at 
Green  Eiver,  Wyoming.  All  of  these  enterprises  Avere  begun 
during  1885  or  1886.  Of  these  the  Colorado  Cooperative 
Mercantile  Association,  of  Denver,  has  been  most  immedi- 
ately successful. 

Productive  Cooperation. 

The  laboring  classes  of  this  country  have  been  quick  to 
see  the  limitations  of  distributive  cooperation,  and  to  a 
hitherto  unprecedented  extent  are  turning  their  energies  to 
the  more  difficult  task  of  cooperative  production.  Li  over 
twenty  industries  attempts  are  now  being  made  to  introduce 
this  form  of  organization.  The  list  given  below  will  best 
serve  to  indicate  the  industrial  and  geographical  distribution 
of  these  enterprises  : 

1.  Cooperative  Baking  Powder  Co  ,  Elkhart.  Ind. 

2.  Cooperative  Box  Factory,  Cincinnati,  Ohio. 

3.  National  K.  of  L.  Cooperative  Broom  Co.,  Cmcinnnati,  Ohio. 

4.  Carpentering  : 

a.  Carpenters'  Cooperative  Association,  Decatur,  III. 

b.  Cooperative  Sash  and  Blind  Factory,  Rushville,  Ind. 

•5.  Clothing  Factories  : 

«.  Our  Girls'  C'o5perative  Clothing  Manufacturing  Co.,  158  N. 
Market  street,  Chicago,  111. 


410  Three  Phases  of  Cooperation  i?i  the  West. 

b.  Manufacturing  Tailoring  Co.,  of  Chicago,  III. 

c.  Martha  Washington  Cooperative  Overall  and  Knit  Work 

Association,  Indianapolis,  Ind. 

6.  Coopers'  Cooperative  Association,  Detroit,  Mich. 

7.  Expressmen,  Detroit,  Mich. 

8.  Foundrymen's  Cooperative  Manufacturing  Co.,  Chicago,  III. 

9.  Furniture  Workers  : 

a.  Cooperative  Reed  Chair  Factory,  Michigan  City,  Ind. 

b.  Mechanics'  Furniture  Association,  St.  Louis,  Mo. 

c.  Central  Furniture  Co.,  St.  Louis,  Mo. 

d.  Furniture  Workers'  Association,  St.  Louis,  Mo. 

e.  Cooperative  Furniture  Co.,  Cincinnati,  Ohio. 

10.  Cooperative  Match  Factory,  Indianapolis,  Ind. 

11.  Mining  : 

a.  Cooperative  Coal  Co.,  Bloomington  111. 

b.  Cooperative  Mining  Co.,  Fairbury,  111. 

c.  Cooperative  Coal  Co.,  Peoria,  111. 

d.  Union  Mining  Co.,  Cannelburg,  Ind. 

e.  Cooperative  Mining  Co.,  Fontanet,  Ind. 
/.  Cooperative  Mining  Co.,  Huntsville,  Mo., 

g.  Summit  Cooperative  Coal  and  Mining  Co.,  Macon,  Mo. 

12.  Nail  ]Mills  : 

a.  Steubenville,  Ohio. 

b.  Iron  and  Steel  Nail  Works,  Belleville,  111. 

c.  Wellston,  Ohio. 

13.  Cooperative  Packing  and  Provision  Co.,  Chicago,  111. 

14.  Cooperative  Corn-Cob  Pipe  Co.,  St.  Charles,  Mo. 

15.  Planing  Mills  : 

a.  East  Side  Planing  Mill,  Kansas  City,  Mo. 

b.  Mechanics'  Planing  Mill,  St.  Louis,  Mo. 

16.  Pottery  Works  : 

a.  Potters'  Cooperative  Co.,  East  Liverpool,  Ohio. 

b.  Standard  Cooperative  Pottery  Co.,  East  Liverpool,  Ohio. 

c.  Ohio  Valley  Cooperative  Pottery  Co. ,  Tiltonville,  Ohio. 

17.  Publishing  Companies  : 

a.  Publishers  of  the  Knights  of  Labor,  Chicago,  III. 

b.  Cooperative  Publishing  Co.,  Scandia,  Kan. 

c.  Publishers  Trades- Union,  Atchison  Kan. 

d.  Publishers  Daily  Evening  Star,  Bay  City,  Mich. 

e.  Publishers  Industrial  News,  Toledo,  Ohio. 

18.  Boot  and  Shoe  Cooperative  Association,  Detroit,  Mich. 


Productive  Cooperaiion.  411 

19.  Soap  "Works. 

a.  Assemblies  Cooperative  Soap  Co.,  Toledo,  Ohio. 

b.  Knights  of  Labor  Cooperative  Soap  Co.,  Chicago,  111. 

20.  Stove  "Works: 

a.  Cooperative  Co.,  Bloomington,  111. 

b.  "Western  Stove  Works,  Peoria,  111. 

c.  "Western  Stove  Manufacturing  Co.,  St.  Louis,  Mo. 

d.  Cooperative  Stove  Co.,  Cleveland,  Ohio. 

21.  Cooperative  Tile  Co.,  Cable,  111. 

22.  Tobacco  Factories: 

a.  Cooperative  Cigar  Factory,  Lafayette,  Ind. 

b.  Cooperative  Cigar  Co.,  Delaware,  Ohio. 

In  the  foregoing  list  I  have  included  a  few  companies 
that  are  already  dead,  but  concerning  these  certain  facts 
have  been  obtained  tliat  seem  to  be  of  importance,  and  all 
of  them  will  be  mentioned.  Some  may  have  died  since  my 
information  concerning  them  was  obtained,  but  no  company 
has  been  included  in  the  list  except  such  as  appeared  to  have 
a  recent  history  worth  knowing,  and  most  of  them  are  living 
and  said  to  be  prosperous.  The  more  important  among 
them  will  be  briefly  noticed. 

MixiXG  COMPAXIES — (1).  In  1883  certain  men  at  work 
for  the  Buckeye  Mining  Company,  of  Cannelburg,  Indiana^ 
joined  L.  A.  1436  of  the  K.  of  L.,  and  were  in  consequence 
discharged.  They  had  credit  enough  to  enable  them  to 
borrow  $"2,000,  with  which  they  leased  land  near  the  Buck_ 
eye  works  and  sunk  a  shaft.  To  meet  their  notes  when 
maturing  they  appealed  for  help  to  the  order  of  the  K.  of 
L.,  and  March  3d,  1884,  the  Executive  Board  issued  a  cir- 
cular stating  their  case  and  enthusiastically  pleading  their 
cause.  Powderly,  at  that  time  less  experienced  and  more 
hopeful  than  since,  wrote  as  follows  : 

"Can  anything  be  done  for  our  Cannelburg  brothers?  If  no 
other  plan  presents  itself,  levy  an  assessment  or  issue  an  appeal — 
anything  to  preserve  them.  The  money  is  well  invested;  really  it 
is  the  first  sensible  move  that  has  been  put  into  practical  operation. 
These  men  are  locked  out,  and  instead  of  sitting  down  and  sucking 


412  Tliree  Pliases  of  Cooperation  in  the  West. 

their  thumbs  in  idleness,  awaiting  assistance  from  the  order,  they 
go  to  work  and  Ihink  tlie  enemj^  by  entering  into  competition  with 
him.  Let  them  have  the  Assistance  fund,  the  Cooperative  fund — 
only  don't  let  them  fail.  It  will  be  the  biggest  card  for  the  order 
we  ever  played.  Count  on  my  entire  and  hearty  cooperation  in 
anything  you  may  do  for  them." 

The  82,000  needed  for  immediiite  use  was  advanced  by  L. 
A.  300,  composed  of  glass-workers,  who  had  been  helped  by 
the  order  to  a  successful  issiie  in  a  strike  not  long  before.  The 
general  Executive  Board  of  the  K.  of  L.  was  incorporated 
as  the  Union  Mining  Company,  of  Cannelburg,  Indiana. 
Ten  thousand  dollars  was  raised  by  the  issuing  of  two 
thousand  debentures  of  five  dollars  each,  which  Averc  taken 
by  individuals  or  assemblies.  It  was  decided  that  from  the 
proceeds  of  the  mine  were  to  be  paid,  (1)  current  Avages  to 
laborers;  (3)  incidental  expenses,  and  (3)  five  per  cent, 
interest  to  debenture  holders.  If  there  should  be  any  profits 
remaining  they  were  to  be  divided  so  that  ten  per  cent, 
should  go  to  the  general  cooperative  fund,  ten  per  cent,  to 
the  sinking  fund  for  the  purchase  of  debentures  when  they 
should  be  offered,  three  per  cent,  to  the  local  educational 
fund,  and  seventy-seven  per  cent,  to  be  divided  equally 
between  labor  and  capital,  "'in  proportion  to  A^alue  of  invest- 
ment." Plans  WTre  made  for  laying  off  the  land  into  small 
lots  and  selling  these  to  the  men  on  easy  terms  for  homes. 
A  cooperative  store  was  to  be  started  which  should  save  the 
laborer  from  the  necessity  of  trading  at  the  old  Buckeye 
''pluck  me,"  and  everything  seemed  to  promise  immediate 
success. 

When  everything  was  ready  to  begin  operations  it  was 
found  that  those  concerned  had  been  reckoning  without 
their — railroad.  A  switch  had  been  built  from  the  railroad 
to  the  mine,  but  though  the  general  manager  of  the  road — 
Mr.  Peabody,  of  the  Ohio  and  Mississippi — made  repeated 
promises  to  have  it  connected  Avitli  the  main  track,  the  work 
still  remained  undone.  Thus,  having  invested  over  112,000 
in  the  affair,  the  Knights  found  themselves  unable  to  ship 
.a  ton  of  coal,  because  the  old  Buckeye  company  had  influ- 


Prodnctivc  Cooperation.  41? 

ence  enough  to  make  a  common  carrier  viulate  its  trust. 
Even  were  the  switch  connected  witli  the  main  track,  it  was 
certain  that  the  road  would  discriminate  against  the  coope- 
rators.  To  enforce  their  rights  in  tlie  courts  was  a  proceed- 
ing far  too  costly  to  he  undertaken  hy  those  who  had 
strained  every  nerve  to  make  the  necessary  imjirovements  at 
the  mine.  Nothing  remained  but  to  sell  out  for  what  could 
be  got.  The  details  of  closing  up  the  affairs  of  the  company 
I  do  not  know. 

2.  At  Fairbury,  Illinois,  there  was  a  strike  of  miners  in 
the  spring  of  1S8G.  They  sunk  a  shaft  and  began  taking 
out  coal  for  themselves,  and  secured  most  of  the  local  trade. 
The  railroad  company  refused  to  lay  a  side  track  to  the 
mine.  The  men  were  afraid  to  go  to  the  expense  of  laying 
a  track  themselves,  lest  after  it  was  finished  the  comjianv 
should  refuse  to  haul  the  coal,  or  rather  should  refuse  to 
furnish  cars  for  hauling  it.  "  The  courts  have  decided  that 
while  a  railroad  may  be  compelled  to  haul  freight,  it  cannot 
be  compelled  to  furnish  cars."  Such  failures  as  the  abovc^ 
are  obviously  gratuitous.  It  is  cases  like  these  that  cause 
the  labor  papers  to  insist  that  justice  is  becoming  a  luxury 
which  the  poor  cannot  afford. 

3.  The  Cooperative  Mining  Company  of  Fatanet,  Indiana, 
went  to  pieces,  after  a  general  and  acrimonious  quarrel 
among  its  members.  Liabilities  §10,000;  assets  not  men- 
tioned. 

4.  At  Huntsville,  Missouri,  the  largest  mine  in  the  place- 
was  deserted  for  five  months  in  consequence  of  a  strike.  At- 
last  an  arrangement  was  made  by  which  the  miners  took 
entire  control  of  the  mine,  using  the  company's  machinery^ 
and  paying  to  the  company  a  royalty  of  one  cent  per  bushel. 
All  over  this  belongs  to  the  miners,  and  is  used  to  meet 
running  expenses,  the  net  profit  being  tlien  divided  among 
the  men. 

5.  At  Peoria,  Illinois,  the  Cooperative  Coal  Company  is. 
said  to  have  a  capital  of  8'30,000  and  to  be  prospering. 


414  Tiwee  Phases  of  Cooperation  in  the  West. 

G.  Two  of  the  mining  companies  seem  to  be  conspicuously 
successful.  One  of  these  is  located  at  Bloomington,  Illinois. 
It  was  incorporated  July  18,  1885.  with  a  nominal  capital  of 
$30,000.  Like  most  of  the  other  attempts  of  the  kind,  it 
originated  in  dissatisfaction  with  the  wages  and  treatment 
received  from  an  established  company.  After  the  enterprise 
was  begun  the  men  interested  still  kept  on  at  their  work, 
and  the  old  company  kept  intensifying  their  earnestness  by 
getting  larger  mine  cars  and  docking  them  more  and  more 
for  the  slack  contained  in  the  coal.  When  the  first  load  of 
coal  was  drawn  from  the  new  shaft  that  the  cooperative 
company  had  sunk^  there  was  great  rejoicing,  and  this  first 
load  was  repeatedly  auctioned  off,  bringing  in  all  five  hun- 
dred and  five  dollars. 

The  shares  of  the  company  are  one  hundred  dollars  each, 
and  it  is  simply  a  common  joint-stock  concern;  but  the 
thirty  shares  are  held  by  twenty-two  persons,  all  of  whom 
work  in  and  about  the  mine,  with  the  exception  of  one  or 
two  merchants,  who  bought  stock  to  obtain  the  good-will  of 
the  miners. 

7.  The  Summit  Cooperative  Coal  and  Mining  Company, 
operating  mines  near  Bevier,  Macon  county.  Mo.,  was  incor- 
porated in  July,  1885.  The  immediate  cause  was  a  strike 
against  the  employment  of  negro  labor  by  the  old  company. 
The  capital  stock  is  85,000  in  ten-dollar  shares,  which  are 
held  by  one  hundred  and  fifty  persons,  and  is  nearly  all  paid 
in.  The  company  holds  the  lease  of  two  mines,  giving 
claim  to  four  hundred  and  fifty  acres  of  coal,  one  hundred 
and  thirty  acres  of  land  and  thirty-six  tenement  houses. 
The  royalty  for  the  first  year  is  remitted.  AVork  is  plentiful 
and  wages  high  in  winter,  but  at  this  time  the  profits  are 
also  greatest,  even  considering  the  high  wages.  There  is 
work  for  two  hundred  and  fifty  men  in  winter  and  for  only 
one  hundred  and  forty  in  summer.  The  members  of  the 
company  therefore  expect  to  provide  constant  work  for 
themselves,  and  also  to  make  a  certain  amount  of  profit  from 
that  done  by  the  ''transients"  between  October  and  April. 


Productive  Cooperation.  415 

The  men,  whether  shareholders  or  not,  are  to  submit  to  a 
five  per  cent,  reduction  from  their  nominal  wages,  which  id 
to  be  added  to  the  profits  of  the  company.  No  profits  are 
to  be  divided  until  the  company  shall  have  a  surj^lus  of  net 
profits  to  the  amount  of  $12,000.  The  division  of  j)rofits  is 
left  to  the  board  of  directors,  and  non-shareholding  laborers 
are  to  receive  '*an  equitable  dividend  in  proportion  to  the 
amount  of  wages  earned."  Xo  person  can  own  more  than 
ten  shares.  The  value  of  the  annual  product  is  about 
$85,000.  The  company  farmed  some  of  their  land  during 
the  last  year,  and  expect  to  make  some  brick,  put  up  a 
store,  and  build  additional  tenement-houses  as  soon  as  pos- 
sible. Eelations  with  the  railroads  are  thus  far  very  satis- 
factory, and  coal  dealers  in  a  place  as  distant  as  Atchison, 
Kansas,  find  it  profitable  to  advertise  in  the  labor  papers 
that  they  keep  the  ''Bevier  coope^'ative  coal."' 

FuRXiTUEE  Makers.' — 1.  In  1878  a  comi^auy  of  strikers 
organized  the  St.  Louis  Furniture  Workers'  Association, 
and  began  what  has  proved  a  prosperous  career.  The 
amount  of  capital  at  the  present  time  I  have  not  learned, 
and  have  no  means  of  judging  except  from  the  statement 
that  the  shares  are  twenty-five  dollars  each,  and  that  there 
are  two  hundred  and  eighty  shareholders.  Of  the  share- 
holders ninety-six  are  laborers,  and  since  February  1st,  1886, 
they  have  given  up  ten  per  cent,  of  their  wages  to  form  a 
fund  for  buying  in  the  outside  shares.  No  person  can  hold 
more  than  twenty  shares.  Wages  are  regulated  by  commit- 
tees appointed  for  the  purpose.  Part  of  the  men  are  paid 
by  the  week  at  from  twelve  to  fifteen  dollars  per  week,  and 
the  piece-workers  receive  what  are  considered  fair  wages. 
Profits  remained  undivided  till  1884,  when  a  dividend  was 
declared  and  paid  in  stock.     The  stock  is  now  all  taken. 


^For  the  facts  regarding  this  and  some  other  St.  Louis  enterprises, 
I  am  indebted  to  an  article  which  appeared  in  UtiQAge  of  Steel,  about 
a  year  ago. 


416  Tltree  Phases  of  Coupcration  in  the  WesL 

2.  The  Central  Furniture  Company,  also  of  St.  Louis, 
began  operations  in  1881.  The  capital  stock  is  $30,000, 
which  is  all  paid  up.  The  shares  are  one  hundred  dollars 
each,  and  the  number  which  can  be  held  by  one  person  is 
not  limited;  the  stock  is  held  by  some  fifty  persons,  about 
four-fifths  of  Avhom  are  at  work  for  the  company.  In  1882, 
at  the  end  of  the  first  year's  business,  a  possible  six  per  cent, 
dividend  was  carried  to  the  reserve  fund;  in  1883  a  dividend 
of  forty-five  per  cent,  was  declared,  but  only  thirty-five  per 
cent,  was  made  payable,  and  this  in  stock;  in  1884  a  twenty 
per  cent,  dividend  was  declared,  five  per  cent,  of  which  was 
paid  in  cash,  and  the  rest  in  stock;  in  1885  the  dividend 
was  passed. 

3.  A  third  enterprise  of  this  kind,  also  of  St.  Louis,  is 
the  Mechanics'  Furniture  Association,  which  began  business 
in  March,  1885.  The  capital  stock  is  $25,000,  half  paid  in. 
The  shares  are  fifty  dollars  each,  and  those  that  have  been 
taken  are  held  by  one  hundred  and  fifty  persons,  sixty-five 
or  seventy  of  whom  are  workers.  Nine  directors  have  gen- 
eral control  of  the  wages;  three  trustees  look  after  the  finan- 
cial part  of  the  concern,  but  the  president  has  power  to 
make  purchases  and  sales.  Ten  i)er  cent,  of  the  wages  will 
be  held  back,  and  stock  dividends  declared  till  the  shares 
arc  all  taken. 

4.  The  Cooperative  Furniture  Company,  of  Cincinnati, 
Ohio,  was  incorporated  July  13th,  1886,  and  began  work  on 
the  25th  of  the  following  October.  The  immediate  cause 
of  the  formation  of  the  company  was  the  failure  of  the 
**' eight-hour  strike.^'  The  capital  stock  is  $50,000,  divided 
into  shares  of  $100  each  ;  the  members  of  the  company  must 
each  hold  the  same  number  of  shares.  At  the  last  of  Jan- 
uary, 1887,  $34,500  of  stock  was  taken,  which  was  held  by 
sixty-nine  persons.  The  last  six  purchasers  of  stock  have 
paid  tAventy-five  dollars  premium  ont  heir  shares,  which,  if 
I  understand  my  informant  correctly,  means  a  premium  of 
five  dollars  per  share.     There  arc  fifty-one  men  employed. 


Productive  Cooperation,  417 

all  of  whom  own  stock.  Profits  are  to  be  divided  equally 
among  shareholders.  Their  opinion  is  that  what  is  called 
distinctively  "profit-sharing 'Ms  ''a  good  scheme  for  the 
manufacturer,"  an  idea  which  is  rather  common  with  the 
more  radical  of  the  thinkers  among  laborers. 

5.  The  Cooperative  Eeed  Chair  Factory,  of  Michigan 
City,  Ind.,  was  organized  August  14th,  1886.  The  old 
factory  decided  to  use  convict  labor,  and  so  the  men  began 
on  their  own  account.  The  nominal  cajoital  is  850,000,  in 
five-dollar  shares ;  the  value  of  the  annual  product  will  be 
about  $25,000.  There  are  at  present  five  hundred  share- 
holders. The  company  employs  forty-two  men,  of  whom 
all  but  eight  are  shareholders,  and  these  eight  are  all 
minors.  Profits  are  divided  in  proportion  to  the  amount  of 
stock  held.  Henry  Bird,  the  secretary  of  the  company,  has 
had  some  twenty  years'  experience  in  labor  organizations, 
and  looks  forward  to  "universal  cooperation"  as  possibly 
to  be  attained  in  three  or  four  generations.  Ignorance  and 
jealousy  he  finds  the  greatest  drawbacks. 

Planing  Mills. — 1.  The  Mechanics'  Planing  Mill 
Company,  St.  Louis,  Mo.,  began  business  in  1874  with  a 
nominal  capital  of  850,000,  but  with  a  supply  of  available 
cash  amounting  only  to  $10,000.  The  concern  is  only 
slightly  cooperative  in  practice,  and  not  at  all  so  organi- 
cally. The  transferable  shares  are  of  the  value  of  $500,  and 
were  issued  to  outside  parties  or  workers,  for  cash  or  scrip — 
the  latter  representing  unpaid  wages.  There  were  at  first 
twenty-five  or  thirty  stockholders,  about  three-fourths  of 
whom  were  laborers.  The  officers  make  purchases  and  sales, 
but  a  board  of  directors  fixes  the  amount  of  wages.  For  a  long 
time  the  company  was  very  much  embarrassed  by  lack  of 
adequate  capital.  A  book-keeper  of  the  early  time  says 
that  on  pay-day  he  was  compelled  to  settle  first  with  non- 
shareholders,  and  then  pay  the  members  of  the  company 
only  just  as  much  as  he  thought  they  had  to  have  to  pre- 
vent starvation.  The  shareholders,  who  were  also  workers, 
27 


418  Three  Phases  of  Cooperation  in  the  West. 

were  mainly  Germans  ;  they  grumbled  at  this  sort  of  treat- 
ment, but  submitted.  The  company  was  at  one  time  refused 
ten  feet  of  belting  because  the  cash  did  not  accompany  the 
order.  In  the  second  year  a  fire  caused  a  loss  of  88,000  ; 
they  managed  to  get  lumber  on  credit,  and  the  stockholders 
put  up  the  building.  After  this  they  began  to  conquer 
success,  and  in  188-4  the  stock  was  all  taken.  They  now 
have  an  undivided  surplus  of  $35,000,  and  the  shares  are 
worth  double  their  face  value.  Dividends  have  usually 
been  ten  per  cent.  The  wages  paid  for  piece  work  are 
usually  a  trifle  higher  than  are  paid  elsewhere  in  the  city. 

2.  The  East  Side  Planing  Mill,  of  Kansas  City,  Missouri, 
though  spoken  of  as  cooperative,  is  really  a  profit-sharing 
enterprise,  and  one  where  the  latter  principle  has  only  re- 
cently been  introduced. 

Cakpentering. — 1.  The  Carpenters'  Cooperative  Asso- 
ciation, of  Decatur,  111.,  was  incorporated  October  17th, 
1885.  Stock  is  $5,000,  in  ten-dollar  shares,  held,  or  at 
least  subscribed  for,  by  eighteen  persons.  Profits  are  divided 
on  basis  of  stock  owned,  but  the  association  aims  to  pay  a 
little  better  wages  than  competing  firms.  Twenty-three 
thousand  dollars'  worth  of  work  was  done  during  the  first 
quarter,  and  from  repeated  notices  in  the  labor  press,  it 
may  be  inferred  that  the  association  is  still  prosperous. 

2.  Of  the  nature  of  the  Cooperative  Sash  and  Blind  Fac- 
tory, at  Eushville,  Ind.,  I  have  not  been  able  to  learn  defi- 
nitely. 

Stove  Works. — 1.  The  Cleveland  Cooperative  Stove 
Company  is  a  large  institution,  and  one  long  established. 
It  was  incorporated  in  1867,  and  was  for  some  time  thor- 
oughly cooperative,  profits  being  divided  with  the  laborers. 
A  long  and  gallant  fight  was  made,  but  under  this  manage- 
ment it  was  found  that  not  enough  capital  could  be  secured. 
The  works  were  practically  closed  for  two  years,  and  when 
work  was  resumed  the  company  was  an  ordinary  joint  stock 


Productive  Cooperation.  419 

-concern,  except  that  a  good  deal  of  the  stock  was  hekl  by 
employes.  The  capital  is  8250,000,  in  shares  of  one  hundred 
dollars  each.  Of  the  three  hundred  and  fifty  men  employed, 
about  ninety  are  shareholders.  The  value  of  the  annual 
product  is  about  8400,000.  Profits  are  now  divided  on  the 
basis  only  of  stock  held.  A  branch  house  is  established  at 
St.  Louis.  The  experience  of  this  company  is  of  use  as 
giving  an  obvious  and  concrete  example  of  the  rule  that 
capital  must  be  allowed  a  sufficient  return,  or  it  will  not  be 
used  to  provide  for  the  laborer  the  means  of  laboring. 

2.  The  Cooperative  Stove  Company,  of  Bloomington, 
Illinois,  was  incorporated  in  June,  1886.  A  strike  preceded 
its  formation,  caused  partly  by  low  wages  and  partly  by  the 
persistence  of  the  old  company  in  the  method  of  putting  on 
a  large  force,  doing  a  year's  work  in  six  or  seven  months, 
and  then  discharging  the  men  for  the  remainder  of  the  year. 
The  capital  stock  is  812,000  in  810  shares,  this  being  the 
smallest  share  which  the  laws  of  Illinois  allow.  There  are 
forty  shareholders,  and  no  one  is  allowed  to  hold  more  than 
one  hundred  shares.  A  circular  appeal  was  issued  to  the 
assemblies  of  the  Knights  of  Labor,  and  various  local  and 
district  assemblies  together  subscribed  for  84,000  of  stock. 
Profits  are  divided  according  to  amount  of  stock  held,  but 
as  long  as  all  the  stock  is  not  taken  any  of  the  men  at  work 
for  the  company  can  join  it. 

3.  Of  the  two  other  companies,  I  know  little  more  than 
that  they  are  reported  to  exist. 

Pottery  axd  Tile  Works. — 1.  The  Standard  Coopera- 
tive Pottery  Company,  of  East  Liverpool,  Ohio,  was  incor- 
porated August  18,  1886.  A  favorable  opportunity  offered 
at  that  time  for  purchasing  the  works  that  the  company  now 
owns,  and  the  men  organized  to  take  advantage  of  this 
opportunity,  the  object  being,  as  stated  by  one  of  the  men, 
to  secure  to  the  workers  the  profits,  if  there  were  any,  of 
the  business,  and  at  any  rate  to  provide  steady  work  for  the 
stockholders.     The  capital  stock  is  820,000  in  forty  shares, 


4*20  Three  Phases  of  Cooperation  in  the  West. 

which  are  held  by  thirty-four  persons.  No  person  can  hold 
more  than  two  shares,  and  each  stockholder  has  but  one 
vote.  Fifty-four  men  are  employed,  of  whom  twenty-six 
are  shareholders.  The  value  of  the  annual  product,  in  case 
the  works  are  run  the  full  fifty-two  weeks,  is  $70,000.  The 
company  manufacture  iron-stone  china  and  decorated  ware, 
and  are  doing  a  good  business  at  present.  They  do  not 
expect  to  realize  any  profits  before  the  end  of  1887,  as  it  is 
found  expensive  to  get  the  product  into  new  markets. 

2.  The  Ohio  Valley  Cooperative  Pottery  Co.,  ''manu- 
facturers of  Rockingham  and  yellow-ware,  terra  cotta  hang- 
ing baskets,  flower-pots,  etc.,"  was  organized  on  November 
18,  1885.  The  paid-up  capital  is  S4,000,  held  by  twenty- 
six  individuals.  The  number  of  men  employed  is  sixteen  to 
eighteen,  of  whom  perhaps  a  majority  do  not  own  stock  or 
share  in  profits. 

3.  The  Cooperative  Tile  Company,  of  Cable,  Illinois,  was 
organized  in  March,  1886,  after  the  feasibility  of  such  an 
undertaking  had  been  discussed  at  length  in  the  local  as- 
sembly of  the  Knights  of  Labor.  The  capital  stock  is 
$4,000,  in  shares  of  fifteen  dollars  each,  and  is  held  by 
twenty-three  persons.  The  value  of  the  annual  product  is 
estimated  at  $15,000.  Eighteen  laborers  are  employed,  of 
whom  all  but  four  own  stock,  and  these  can  receive  stock 
in  exchange  for  labor  if  they  choose.  Profits  are  divided 
on  the  basis  of  capital  invested.  No  member  is  allowed  to 
hold  more  than  twelve  shares,  or  if  he  does  so  they  secure 
him  no  additional  votes.  Most  questions  are  settled  by 
the  wishes  of  the  majority  of  members,  but  when  issue  is 
made  a  member  holding  twelve  shares  can  demand  twelve 
votes.  The  secretary  writes  that  most  of  the  opposition  to 
the  enterprise  has  come  from  laborers  not  connected  with  it, 
who  are  jealous  and  suspicious  of  the  undertaking.  Lack 
of  sufficient  capital  has  also  hindered  the  development  of 
the  business,  but  orders  are  said  to  be  plentiful  and  pros- 
pects bright. 


Productive  Cooperation.  421 

Clothing  Factories. — 1.  Our  Girls'  Cooperative  Cloth- 
ing Manufacturing  Company  has  received  especial  encour- 
agement from  the  labor  papers  and  the  various  asssemblies. 
The  girls  comprising  the  company  were  locked  out  for 
taking  part  in  the  labor  parade  of  September  6,  though  they 
had  supposed  that  their  employer  had  consented  to  their 
doing  so.  "Being  afterwards  blacklisted,  it  became  a  ques- 
tion of  cooperation  or  starve,"  The  ten-dollar  shares  have 
heen  liberally  subscribed  for  by  the  Knights,  and  the  com- 
pany seems  likely  to  get  started.  It  is  the  intention  to  fit 
up  a  room  with  twenty  or  thirty  machines  and  take  work 
from  the  large  manufacturers  of  ready-made  clothing,  thus 
doing  away  with  the  sub-contractors. 

2.  By  far  the  most  tastefully  printed  copy  of  by-laws  and 
constitution  as  yet  received  from  any  cooperative  enterprise, 
bears  upon  the  cover  the  initials,  M.  W.  C.  A.  Being 
interpreted,  these  letters  signify  Martha  Washington  Coop- 
erative Association,  which  organized  for  the  manufacture  of 
overalls,  shirts  and  knit  goods.  The  nominal  capital  is 
$10,000,  in  five-dollar  shares.  None  but  members  are  to  be 
employed ;  ordinary  wages  are  paid.  Ten  per  cent,  of 
profits  are  to  go  to  a  reserve  fund,  and  the  rest  to  be  shared 
in  monthly  dividends  among  the  workers,  in  proportion  to 
the  amount  of  work  done.  ''Stockholders  not  sewing''  are 
to  receive  six  per  cent,  on  the  investment  after  the  first 
year.     All  the  officers  are  women. 

Other  Industries.— 1.  The  Boot  and  Shoe  Cooperative 
Association,  of  Detroit,  was  organized  in  September,  1885. 
It  has  had  to  fight  hard  for  each  mouth  of  existence  from 
that  time  to  this.  Of  the  850,000  of  nominal  capital,  only 
$1,800  has  been  paid  in.     It  is  thoroughly  cooperative. 

2.  There  seems  to  be  nothing  substantial  under  all  the 
talk  of  those  who  have  the  Chicago  Cooperative  Packing  and 
Provision  Company  in  the  process  of  alleged  creation.  A 
very  conspicuous  advertisement  in  the  luiights  of  Labor  of 


423  Three  Phases  of  Cooperation  in  the  West. 

December  IS,  18SG,  announced  that  830,000  of  the  capital 
stock  of  S500,000  was  already  subscribed.  The  same  adver- 
tisement announced  that  "the  business  will  be  capably  and 
economically  managed  without  risks,  and  depending  on 
regular  profits  through  a  continuous  chain  of  interstate 
union  markets.  The  establishment  will  employ  union  labor 
only,  and  run  on  the  eight-hour  plan.^'  An  editorial  in 
the  same  paper  told  of  an  offer  to  the  company,  made  by 
the  citizens  of  Iowa  City,  to  pay  a  cash  bonus  of  120,000, 
besides  various  local  facilities  for  beginning  business,  worth 
*'at  least  ^^  $30,000  more,  if  the  company  would  locate  their 
works  at  that  place. 

3.  Of  the  other  companies  enumerated  above,  it  will 
hardly  be  worth  while  to  speak.  Of  some  of  them  I  know 
almost  nothing,  except  that  they  are  said  to  exist,  and  that 
they  claim  to  be  cooperative.  The  publishing  companies 
have  been  especially  uncommunicative,  none  of  them  find- 
ing it  possible  to  answer  letters  of  inquiry  concerning  their 
organization  and  methods  of  operation.  Some  of  them, 
there  is  good  reason  to  believe,  are  merely  companies  of  two 
or  three  printers  who  had  money  enough  between  them  to 
start  a  paper,  and  called  the  company  cooperative  because 
anything  so  called  is  now  popular  with  laborers.  Of  some 
of  the  enterprises  there  are  at  hand  statements  as  complete 
as  many  of  those  already  given,  but  it  seems  useless  to  ex- 
tend further  the  accounts  of  half-formed  and  wholly  inex- 
perienced companies. 

Points  Ommitted — Conclusions. 

In  the  foregoing  survey  no  mention  is  made  of  commu- 
nistic societies,  except  as  they  may  have  originated  in  what 
is  known  as  "labor  agitation. '^  Neither  has  any  attempt 
been  made  to  obtain  the  facts  relative  to  the  numerous  and 
prosperous  "building  associations.^'  Drs.  Straw  and  Bemis 
have  described  with  sufficient  fullness  their  methods  and 
influence. 


Pointfi  Omiited.  423 

As  for  collecting  and  tabulating  the  concrete  results 
achieved  in  the  middle  West  by  these  associations,  it  can 
only  be  said,  that  while  such  a  summary  would  have  some 
value,  yet  it  is  not  possible  for  a  single  individual  to  com- 
pile it  for  so  large  an  area.  Laws  requiring  annual  reports 
to  some  state  official,  and  the  work  of  the  state  bureaus  of 
labor  statistics,  might  render  the  facts  accessible.  Insurance 
companies,  claiming  to  operate  on  a  ''cooperative"  or 
''mutual"  plan,  are  to  be  found  all  over  the  country,  and 
differ  scarcely  at  all  in  aims  or  management  from  those 
that  have  seen  fit  to  choose  other  words  "to  conjure  with" 
in  the  writing  out  of  their  advertisements.  Profit-sharing 
is  a  form  of  cooperation  much  commended  by  many  writers 
on  these  topics.  I  have  learned  of  ten  or  fifteen  establish- 
ments in  the  middle  West  where  practical  attempts  in  this 
direction  have  been  made,  but  they  are  so  entirely  tentative 
that  any  detailed  statement  would  be  of  little  use.  Mr.  N. 
0.  Nelson,  of  the  Nelson  Manufacturing  Company  of  St. 
Louis,  has  recently  published  a  pamphlet  on  the  subject, 
in  which  he  tells  of  the  experience  of  himself  and  others  in 
this  direction,  and  gives  his  conclusions  as  to  the  efficacy  of 
this  method  of  solving  some  of  the  industrial  problems  of 
the  time. 

The  causes  that  now  retard  the  development  of  the  coop- 
erative element  in  our  industrial  organization  may  be  given 
under  six  heads,  and  these  can  in  turn  be  grouped  by  pairs 
in  three  classes.  The  first  two  are  external  and  adventitious, 
the  second  two  are  inherent  in  the  character  of  the  individual 
cooperators,  and  the  third  two  are  inherent  in  the  nature  of 
cooperative  enterprises. 

1.  A  serious  drawback  is  the  want  of  proper  legislation, 
which  has  been  previously  mentioned  while  discussing  coop- 
eration among  farmers.  A  bill  is  now  before  the  Illinois 
Legislature  to  make  possible  the  incorporation  of  cooperative 
companies,  but  its  provisions  are  so  general  as  to  be  nearly 
worthless.     Experience  has  proved   that  careful,    definite. 


424  Three  Phases  of  Cooperation  in  the  West. 

circumstantial  legislation  is  to  successful  cooperation  not  an 
impediment  but  a  help,  not  a  restraint  but  a  guide. 

2.  A  general  organization  to  embrace  all  cooperative 
enterprises  is  much  needed.  The  Knights  of  Labor  have 
attempted  much  in  this  direction  and  accomplished  little  as 
yet.  What  is  called  the  American  Cooperative  Union  was 
organized  toward  the  end  of  1886  in  Ohio.  William  Gossage, 
of  Mount  Vernon,  Ohio,  is  the  ''governor  general,''  and 
the  central  office  is  located  at  Janes ville,  in  the  same  state. 
It  seems  to  have  had  a  purely  local  origin,  but  aims  ''to 
combine  in  one  grand  union  all  beneficiary,  trades  unions, 
educational,  religious,  supply,  distributive,  productive, 
building  and  banking  companies,  societies,  or  associations 
of  whatever  name  or  nature,  in  order  to  bring  about  com- 
plete cooperation  through  the  interwoven  interests  of  all." 
The  aims  are  certainly  comprehensive  and  the  effort  com- 
mendable, but  a  reading  of  the  constitution,  wherein  poetry 
is  quoted,  and  grammar  is  used  as  bad  as  that  just  given^ 
leads  one  to  doubt  if  the  union  can  be  successful.  It  seems 
altogether  likely  that  some  of  the  attempts  in  this  direction 
now  being  inade  in  the  East  will  result  in  the  formation  of 
a  society  or  societies  that  can  extend  west,  as  fast  as  there 
are  established  cooperative  companies  to  be  benefited 
thereby.  The  cooperative  fair  at  Cincinnati  proves  the 
desire  for  inter-communication  and  the  possibility  of  it. 
Elaborate  attempts  like  that  of  the  "American  Union"  and 
the  Cincinnati  "Distributive  Association"  Ccin  only  serve  as 
evidences  of  the  American  tendency  to  lay  the  cap-stone 
before  the  foundation. 

3.  The  checks  upon  the  extension  of  cooperation  that 
result  from  bad  morals  are  very  obvious,  and  have  been 
often  enough  insisted  on.  It  is  because  good  morals  are  so 
essential  to  successful  cooperation  that  cooperation,  where 
possible,  is  such  an  efficient  aid  in  the  development  of  better 
morality. 


Po'mts  Omitted.  425 

4.  Lack  of  intelligence  is  another  obstacle  which  can  be 
hardly  overcome,  except  by  removing  it.  The  intellectual 
faculty  which  is  most  important  to  a  coOpcrator,  is  the 
power  to  estimate  correctly  his  own  capacity  and  that  of  his 
coadjutors,  in  order  that  he  may  choose  leaders  wisely,  and 
submit  to  them  willingly.  The  weakest  point  in  the  think- 
ing of  laborers  and  in  the  arguments  of  labor  leaders,  is 
that  they  cannot  manage  to  appreciate  the  economic  value 
of  brains.  The  greatest  desideratum  in  the  economic  dis- 
cussions of  the  present  time  is  a  unit  of  brain  power. 

5.  This  brings  us  to  the  inherent  defect  of  the  cooperative    / 
form  of  industrial  organization,   which  is,  that  under  this 
form  the  highest  prices  cannot  be  offered,  either  to  capital 

or  to  managerial  ability.  As  regards  capital,  this  fact  is 
not  of  great  moment,  as  lenders  do  not  insist  on  very  high 
interest,  if  only  its  payment  be  certain.  It  is  only  while 
enterprises  are  new  that  capital  demands  high  rates,  as 
insurance  against  loss. 

6.  That  cooperative  companies  have,  as  yet,  found  no  way 
to  pay  the  highest  rates  for  brain  power,  is  a  more  serious 
matter.  Francis  A.  Walker  has  carefully  differentiated 
profits  from  insurance  against  loss,  and  from  interest  on 
Ccij)ital,  and  thinks  that  they  are  determined  by  a  law  anala- 
gous  to  that  of  rent.  He  says  that  there  is  a  no-profits  class 
of  entrepreneurs;  that  is,  of  managers  who  get  for  the  work 
of  superintendence  no  more  than  other  laborers  do  for  per- 
forming other  work.  Now,  if  a  manager,  who  produces  for 
the  same  market  as  does  one  of  this  no-profits  class,  can  so 
organize  the  industrial  forces  that  he  controls  as  to  produce 
more  cheaply,  it  is  evident  that  the  difference  in  the  cost  of 
production  at  the  two  establishments  will  measure  the 
amount  of  profits  accruing  to  the  better  manager.  This 
likening  profits  to  rent  leads  us  again  to  consider  the 
capacity  for  affecting  economic  production  resident  in  the 
brain  of  man — or  perhaps  we  should  rather  say,  in  the  non- 
physical  part  of  man.  As  a  fertile  field  produces  for  its 
owner    a    surplus    over    and   above   the   amount   of  labor 


436  Three  Phases  of  Cooperation  in  the  West. 

expended,  so  a  "fertile  brain"  will  produce  for  the  lucky 
entrepreneur  that  owns  it  a  surplus  of  profit  to  which  no 
other  man  can  have  a  claim.  It  may  be  further  noticed 
that  in  the  cultivation  of  brain  power  there  has  been  found 
no  fixed  law  of  diminishing  returns.  While  the  supply  of 
land  is  limited,  and  its  fertility  capable  of  exhaustion,  the 
supply  of  brain  power  is  apparently  limitless,  and  its 
improvability  unmeasured. 

Walker  speaks  always  as  though  it  were  the  ability  of  a 
single  manager  that  had  an  influence  on  profits,  but  that 
basis  is  surely  too  narrow.  Instead  of  ''a  no-profits  class  of 
entrepreneurs,'^  it  would  be  more  in  accordance  with  facts  to 
speak  of  ''a  no-profits  class  of  establishments."  Doubtless 
the  ability  of  the  chief  manager  is  the  most  important  factor 
in  determining  whether  or  not  there  shall  be  any  profits  at 
all,  but  it  is  not  the  only  one.  So  long  as  there  is  in  any 
person  connected  with  a  given  establishment — whether  he 
be  the  superintendent  or  not — the  capacity  to  earn  by  dili- 
gence, or  economy,  or  intelligence,  more  than  his  wages, 
that  person  has  within  himself  the  power  to  influence  the 
amount  of  profits  to  be  made.  The  success  of  any  manager 
must  depend  very  largely  on  the  class  of  men  he  is  able  to 
secure.  The  combined  abilities  of  the  manager  and  the 
men  will  determine  the  place  in  the  industrial  scale  of  a 
given  establishment,  and  so  the  amount  of  profits  it  can 
make.  Production  will  be  cheapest  where  the  energies  of 
all  concerned  are  stimulated  to  the  utmost  possible  limit  of 
continuous  achievement.  The  inherent  weakness  of  coope- 
rative enterprises,  as  usually  conducted,  is  that  profits  are 
so  divided  that  they  fail  to  secure  the  best  managers,  or  the 
best  energies  of  the  managers  secured;  their  inherent 
strength  is  fn  the  fact  that  they  can  secure  the  most  faithful 
and  intelligent  laborers,  and  can  offer  them  inducements  to 
labor  with  a  maximum  of  fidelity  and  intelligence.  The 
relative  importance  of  these  two  factors  in  the  cost  of  produc- 
tion in  a  given  industry  is  a  guide  to  the  probability  of 
successful  cooperation  therein. 


CHAPTER  III. 

COOPERATION  AMOXG  MORMONS. 

A  recent  pamphlet  of  about  a  hundred  pages  bears  the 
following  title  :  "Social  Problems  of  To-day,  or  the  Mormon 
Question  in  its  Economic  Aspects;  a  Study  of  Cooperation 
and  Arbitration  in  Mormon dom,  from  the  Standpoint  of  a 
Wage-worker.''  The  author,  who  uses  the  nom  de  lAume  of 
"  A  Gentile,"  is  Dyer  D.  Lum,  now  of  Chicago,  and  promi- 
nent in  labor  agitation  there.  He  was  for  a  time  a  United 
States  official  in  Utah,  and  wrote  a  previous  pamphlet  on 
''Utah  and  its  People.''  His  last  work  has  been  extensively 
reviewed  by  the  labor  press,  and  has  met  with  much  favor  at 
the  hands  of  the  more  radical.  By  Lum,  as  by  many  writers 
of  his  class,  cooperation  is  used  in  the  broad  sense  of  associ- 
ation. The  great  work  of  compelling  a  desert  not  only  to 
blossom  as  the  rose,  but  to  produce  over  fifty  bushels  of 
wheat  to  the  acre,  he  includes  in  the  results  of  what  he  calls- 
cooperation.  One  sort  of  cooperation  this  certainly  is,  and 
its  claim  to  consideration  in  such  a  stud}"-  as  this  will  be 
examined  later  on.  But,  apart  from  such  a  form  of  indus- 
trial achievement,  the  Mormons  have  built  up  a  mammoth 
mercantile  enterprise  which  is  called  cooperative,  and  by  its 
name  challenges  the  investigation  of  its  claim  to  be  so 
called. 

"Zion's  Cooperative  Mercantile  Institution."^ 

The  great  commercial  enterprise,  which  is  usually  referred 
to  as  the  Z.  C.  M.  I.,  was  undertaken  in  1868.  The  prices 
for  ordinary  commodities,  such  as  merchants  usually  handle, 

Oly  sources  for  this  part  of  the  monograph  are  mainly  these: 
(1)  Lum's  pamphlet,  already  mentioned;  (2)  A  file  of  the  Z.  C.  M. 
I.  Advocate  and  Commercial  Register  for  188G;  (3)  A  lengthy  state- 
ment sent  me  by  H.  W.  Naisbitt,  editor  of  the  Advocate;  (4)  A  copy 

437 


438  Three  Phases  of  Cooperaiion  in  the  West. 

were  as  exorbitant  in  Utah  as  in  most  western  communities, 
and  one  object — and  tlie  main  one  which  was  urged  by 
Briffham  Youno:  for  the  establishment  of  the  "institution" 
— was  to  give  consumers  cheaper  rates.  Speculation  was 
iictive.  * 'Wheat  that  was  bought  in  one  place  for  seventy- 
five  cents  per  bushel,  was  sold  in  isolated  mining  camps  for 
twenty-five  dollars  per  hundred-weight.'"  ''In  1864  mer- 
chants had  risen  to  opulence.  Commerce  was  gradually 
but  surely  throwing  all  money  to  a  few  hands." 

"  Early  in  1868  the  merchants  were  startled  by  the  announce- 
ment '  that  it  was  advisable  that  the  people  of  Utah  Territory  sliould 
become  their  own  merchants,'  and  that  an  organization  should  be 
created  for  them  expressly  for  importing  and  distributing  mer- 
chandise on  a  compreliensive  pUm.  Although  in  the  prosecution  of 
this  work  tlie  church  was  threatened  witli  a  formidable  schism, 
Brigham  Young  never  faltered;  it  was  an  economic  rather  tlian  a 
religious  heresy  he  had  to  confront.  In  Mormon  society  the  two 
elements  of  organization — the  social  and  the  religious — have 
ever  been  combined,  and  it  was  to  prevent  their  threatened  divorce 
that  this  step  became  necessary. 

"  In  October,  1868,  President  Young  called  a  meeting  of  the  mer- 
chants, and  it  was  then  and  there  determined  to  adopt  a  general 
cooperative  plan  throughout  the  territory.  The  late  Mr.  Jennings, 
one  of  the  largest  merchants,  and  perhaps  one  of  the  wealthiest 
men  in  Utah,  rented  his  store  to  a  co5perative  association  for  five 
years.  The  people  possessed  the  genius  of  cooperation  and  Brigham 
Young  possessed  the  will,  while  around  him  there  was  a  small 
circle  of  men  who,  for  commercial  energy  and  honor,  instincts  for 
great  enterprises,  and  financial  capacity  generally,  would  be  es. 
teemed  as  preeminent  in  any  commercial  emporium  in  the  world. 


of  the  "Agreement,  Order,  Certificate  of  Incorporation  and  By- 
Laws  of  the  Z.  C.  M.  I.;"  (5)  Answers  at  length  to  questions  asked 
of  Hon.  John  T.  Caine,  Territorial  delegate  from  Utah;  and  (6) 
Correspondence  with  various  "gentile"  observers  of  the  operations 
of  the  great  "Institution."  With  only  such  sources  as  these,  it  is 
evidently  not  possible  for  one  so  far  away  to  make  an  exhaustive 
study  of  such  an  enterprise;  but  if  all  statements  of  fact  are  care- 
fully credited  to  the  proper  authorities,  the  incompleteness  of  a 
preliminary  study  need  not  mislead. 
'So.  Prob.  of  To-day,  p.  10. 


Zion's  Cooperative  Mercantile  Institution.  429 

The  policy'  which  had  been  wisely  and  considerately  pursued  in 
purchasing  the  stocks  of  existing  firms,  or  receiving  them  as  invest- 
ments at  just  rates,  shielded  from  embarrassment  those  who  other- 
wise would  have  inevitably  suffered  from  the  inauguration  and 
prestige  of  the  new  organization.  Simultaneously  with  the  framing 
of  the  parent  institution,  local  organizations  were  formed  in  most 
of  the  settlements  of  the  territory,  each  drawing  its  supplies 
mainly  from  the  one  central  depot.  The  people,  with  great  unan- 
imity, became  shareholders  in  their  respective  local  'coops,'  and 
also  in  the  parent  institution,  '  Zion's  Cooperative  Mercantile  Insti- 
tution.' Thus,  almost  in  a  day,  was  effected  a  great  reconstruction 
of  the  commercial  relations  and  methods  of  an  entire  community, 
which  fitted  the  purposes  of  the  times  and  preserved  the  temporal 
unity  of  the  Mormon  people,  as  wxll  as  creating  for  them  a  mighty 
financial  bulwark."' 

Besides  the  object  of  reducing  prices  and  uniting  interests, 
there  was  also  the  influence  in  the  minds  of  the  originators 
of  the  plan  of  the  idea  of  developing  home  industries.  **It 
is  evident  that  with  but  one  importing  house  in  the  hands 
of  the  country's  friends,  struggling  industries  could  be 
aided  by  partial,  if  not  absolute,  non-importation;  but  mul- 
tiplying importers,  particularly  self-interested  ones,  would 
nullify  our  theory — the  fostering  of  local  industries.^"' 

In  rej^ly  to  my  questions  as  to  the  number  of  shareholders 
at  various  times,  and  the  maximum,  minimum  and  average 
amount  of  stock  held  by  each,  Mr.  Caine  replies  thus 
guardedly : 

"It  may  be  said  the  number  of  stockholders  was  never  so  num- 
erous as  desirable,  but  that  in  commencing  this  system  many  con- 
ditions had  to  be  taken  into  account.  There  Avere  already  many 
merchants  in  Salt  Lake  City  and  Utah  Territory,  who  w"ere  freely 
consulted,  and  with  great  unanimity  they  became  investors,  many 
of  them  selling  out  their  entire  stock  to  the  new  co5perative  organ- 
ization. These  sales  not  only  gave  goods,  but  buildings  also,  which 
could  not  otherwise  have  been  obtained,  so  that  organization  and  a 
beginning  in  trade  were  almost  simultaneous.  Payment  for  the 
goods  in  excess  of  investment  by  the  retiring  merchants  was  made 

^So.  Prob.  of  To-day,  pp.  10,  11,  and  Naisbitt  writes  to  the  same 
purpose. 
^John  T.  Caine. 


430  Tliree  Phases  of  Cooperaiiun  in  the  Wesf. 

with  that  celerity  which  was  contingent  upon  the  establishment  of 
credit  in  the  regular,  though  then  distant  marts  of  our  country. 
The  first  stockholders  were  of  every  grade,  from  the  holders  of  a 
single  share  of  $100  or  less,  to  holders  of  larger  amounts,  $75,000, 
$50,000,  $25,000  and  $10,000,  by  merchants  and  prominent  men, 
who,  at  the  solicitation  of  the  late  president,  Brigham  Young,  fur- 
nished these  several  amounts.  He  himself  was  a  large  stockholder. 
Originally  the  stockholders  were  all  members  of  the  Mormon 
church,  and  the  majority  are  now  so;    but  some  few  shares  of  stock 

are  occasionally  placed  in  the  open  market The 

intention  of  this  organization  was  that  it  should  be  the  supreme 
importing  house  of  the  people  for  the  territory,  and  that  auxiliaries 
of  local  organization,  for  distribution,  should  be  formed  in  every 
colony  or  settlement.  This  barred  many,  in  those  days  of  limited 
means,  from  identifying  themselves  with  the  parent  institution,  as 
their  little  surplus  was  needed  in  the  local  organization f  so  that 
while  the  stockholders  in  the  Z.  C.  M.  I.  might  never  have  exceeded 
a  thousand,  large  numbers  were  everywhere  committed  to  that 
policy  which  meant  self-defense,  low  prices,  and,  to  the  Mormon, 
the  education  in  business  directions  of  great  numbers  who,  as 
directors,  buyers  and  salesmen,  have  attended  to  this  cooperative 
business,  and  thus  preserved,  in  great  measure,  the  Territory  from 
being  overrun  with  speculators  and  adventurers." 

The  scope  of  the  business  done  may  be  judged  from  the 
following  extract  from  the  full  page  advertisement  of  the 
institution  :  "  Among  our  leading  departments  are  groceries, 
hardware,  metals,  stoves,  tinware,  crockery,  glassware,  dry 
goods,  notions,  clothing,  carpets,  boots,  shoes,  shoe-findings, 
stationery  and  drugs,  continually  replenished  with  the  most 
choice  goods  from  the  markets  of  the  world. '^' 

As  to  the  financial  success  of  the  institution  there  can  be 
no  possible  question.  Its  stock,  to  the  amount  of  $1,000,000, 
has  been  maintained  at  par.  Its  annual  sales  now  reach  a 
figure  somewhere  between  four  and  five  millions,  its  pay  roll 
averages  820,000  per  month,  and  the  freight  bill  is  nearly 
6300,000  per  annum.  Since  beginning  business  in  March, 
1869,  it  has  paid  dividends  to  the  amount  of  81,270,415.86.'' 


"^Z.  C.  31.  I.  Advocate,  November  15,  1886. 
-John  T.  Caine. 


Zion's  Cooperative  Mercantile  Institution.  43i 

The  following  is  the  official  statement  for  the  fiscal  half 
year  ending  July  31,  1886  :' 

RESOURCES. 

Mdse.  on  hand $  995,917  51 

Notes  receivable 180,682  74 

Accounts  receivable 261,322  38 

Cash  on  hand 26,639  10 

Real  estate  in  Salt  Lake  City,   Ogden,   Logan,   Soda 

Sp'gs  and  Provo 240,846  66 

ilachinery  at  shoe  and  clothing  factories  and  tannery.  33,400  00 
17  horses,  2  Mules,  16  wagons,   10  sets  of  harness,  10 

tons  of  oats,  and  4  tons  of  hay 2,311  00 

Provo  Manuf.  Stock 291,40 

?1, 744,410  79 
LIABILITIES. 

Bills  payable $  446,710  02 

Accounts  payable 18,301  34 

LTnpaid  dividends  4, 275  99 

Temporary  deposits  by  customers 3,415  65 

Outstanding  orders  drawn  on  us  for  mdse.  at  retail. . .  1,046  57 

Capital  stock 999,877  71 

Reserves 134,015  30 

Undivided  profits 86,007  61 

§1,744,410  79 

The  places  where  the  Z.  C.  M.  I.  owns  real  estate  mark 
each  the  location  of  a  large  and  prosperous  branch  house, 
and  the  statement  also  indicates  the  j)roductive  undertak- 
ings that  have  been  started  directly  by  the  parent  institu- 
tion. 

The  ^fZwcrt^e,  after  giving  this  statement,  adds:  '-'From 
the  undivided  profits  mentioned  above  a  dividend  will  be 
paid  of  5  per  cent,,  as  usual ;  the  balance  goes  to  the  re- 
serve fund. 

"At  the  annual  election,  held  at  the  Social  Hall  on  the 
5th  inst.,  the  old  ofiicers  and  directors  were  re-elected.''* 

One  who  is  an  enemy  of  the  Mormons,  and  denies  that 

^Z.  C.  M.  I.  Advocate,  October  15,  1886.  There  is  a  mistake  of  $40 
in  adding  the  liabilities  column  of  this  statement. 


433  Three  Phases  of  Cooperatmi  in  the  West. 

the  Z.  C,  M.  I.  is  in  tiny  sense  cooperative,  would  point  to 
this  hist  sentence  as  an  evidence  of  the  fact  that  the  great 
institution  is  hut  one  of  the  means  hy  which  the  Mormon 
hierarchy  holds  in  subjection  the  Mormon  people.  "The 
profits  of  it  are  the  prophet's,"  says  Benjamin  F.  Taylor, 
and  there  are  many  who  hold  that  its  amazing  success  is  no 
more  an  example  of  what  free  industrial  cooperation  can  do 
than  was  the  building  of  the  pyramids.  Gentile  corre- 
spondents'write  that  in  the  upbuilding  of  this  institution 
the  Mormon  people  have  been  merely  "dumb,  driven 
cattle."  "The  Z.  C.  M.  I.  was  originally  organized  to 
keep  out  the  trading  gentile,  and  bind  all  the  people  to- 
gether in  trading  interests  by  giving  them  an  interest  in 
their  church  stores.  The  Mormon  theory  of  cooperation 
looks  well  on  paper,  but  in  practice  it  is  exactly  the  reverse 
of  what  it  pretends  to  be."' 

Even  "on  paper,"  it  can  be  shown  that  the  institution 
is  an  ordinary  joint-stock  corporation,  and  that  its  offices 
have  been  filled  by  the  same  men  that  filled  the  offices  of 
the  Mormon  Church.  Brigham  Young  was  its  first  presi- 
dent, and  John  Taylor  was  his  successor  in  the  position.  It 
is  said  by  many  that  at  first  a  large  number  of  the  people 
held  stock,  but  that  the  smaller  holders  have  been  "crowded 
out."  When,  in  1870,  the  company  was  incorporated  the 
stockholders  numbered  but  twenty-one,  and  of  the  $199,000 
of  stock  then  taken  four  men  held  1177,200  worth.  These 
four  men,  and  the  number  of  their  respective  shares,  were 
as  follows :  William  Jennings,  790  shares;  Brigham  Young, 
772  shares;  William  H.  Hooper,  110  shares;  and  David 
Day,  100.  Next  to  these  came  Brigham  Young,  Jr.,  with 
fifty-three  shares.  Later  on  the  Mormon  Church  itself 
bought  largely  of  the  stock — was  said  to  own  a  third  ;  but 
in  anticipation  of  the  confiscation  of  church  property  this 
has  lately  been  transferred  to  individuals. 

The  Mormon   urges  the  claim   of  the  institution  to  the 

'J.  Brainerd  Thrall,  of  Salt  Lake  City. 


Zion's  Cooperative  Mercantile  Institution.  433 

title  cooperative^  on  the  grounds  that  the  great  corporation 
has  been  operated,  not  in  the  interests  of  the  stockholders, 
but  of  the  people.  Ten  per  cent,  per  annum  has  been  paid 
to  stockholders  on  capital  invested,  but  that  is  really  not 
high  interest  for  a  western  territory ;  and  it  is  urged  that 
prices  have  been  gauged,  not  by  what  could  be  got  for  the 
goods  on  hand,  but  by  the  cost  price  plus  the  lowest  possible 
charge  for>  handling.  It  is  claimed  again  and  again  that  it 
has  never  taken  advantage  of  opportunities  to  charge  a 
monopoly  price  when  there  happened  to  be  an  inadequate 
supply  of  some  commodity  of  which  the  institution  had  a 
large  stock  on  hand.  The  Advocate,  the  monthly  organ  of 
the  Z.  C.  M.  I.,  exhorts  the  "local  coops'^  to  charge  only 
as  much  as  is  really  necessary — not  in  the  name  of  commer- 
cial expediency,  but  in  the  name  of  brotherly  fairness  and 
loyalty  to  the  church.  It  is,  indeed,  from  time  to  time  cov- 
ertly pointed  out  that  expediency  and  duty  indicate  the 
same  course,  but  still  the  highest  note  in  all  the  pleading  is 
that  of  obligation  to  their  neighbors,  to  the  Mormon  Church 
and  to  the  Mormon  people.  "Many  of  the  local  coopera- 
tive stores  have  limited  their  dividends,  retaining  a  part  of 
the  profits  made  each  six  months  to  extend  by  cooi^eration 
industrial  and  manufacturing  facilities,  so  that  furniture, 
lumber,  shoe  factories,  tanneries,  butcher  shops,  dairies, 
grist  mills  and  other  industries  have  been  inaugurated  and 
built  up  slowly,  but  effectually,  from  the  nucleus  of  the 
original  store.  Some  of  the  local  stores  have  retained  a 
half  of  the  surplus  exhibited  on  their  inventories  from  time 
to  time,  for  the  purpose  just  mentioned,  and  while  there  is 
some  danger  of  an  abnormal  expansion  under  enthusiastic 
directories,  the  instances  of  failure  are  rare  indeed."' 

It  is  easy  to  see  how  a  Mormon  looks  at  such  "expansion'^ 
as  resulting  in  a  great  benefit  to  the  community,  while  a 
hostile  critic  can  see  in  it  nothing  but  a  strengthening  and 
multiplying  of  the  chains  that  bind  the  Mormon  people. 


^Caine's  statement. 
28 


434  Three  Phases  of  CoojjeraHo^i  in  the  West. 

One  thing  is  very  obvious,  and  is  insisted  on  by  friends  and 
foes.  This  is  the  fact  that  the  Mormon  mercantile  system 
is  really,  though  not  nominally,  dependent  upon  the  larger 
religious  system  that  makes  of  the  Mormons  a  peculiar  peo- 
ple. ''The  management  of  the  institution/'  says  Caine, 
''is  essentially  democratic  as  to  its  semi-annual  meetings  of 
stockholders,  where  all  persons  give  expression  to  their 
ideas.''  Yet  he  adds :  "But  the  moral,  financial,  and — it 
may  be  said —  ecclesiastical  character  of  the  directors  and 
leading  officers  has  given  such  faith  in  their  integrity  and 
experience  that  but  few  questions  as  to  management  are 
asked."  It  will  be  noticed  that,  viewed  from  a  commercial 
standpoint  alone,  the  results  of  the  operations  of  the  Z.  C. 
M.  I.  have  been  much  the  same  as  those  reached  by  the 
wholesale  coojoerative  stores  of  England.  The  order  of 
development  of  the  local  and  central  establishments  is  exactly 
opposite  in  the  two  cases. 

Other  Forms  of  Mormon  Cooperation. 

As  to  the  economic  bearings  of  this  confidence  in  leaders 
in  other  industries,  the  statement  made  by  Mr.  Caine  well 
expresses  the  Mormon  views  of  the  question,  and  his  words 
"may  as  well  be  quoted  as  paraphrased:" 

"  it  is  beyond  question  that  Utah  would  have  remained  a  desert, 
or  at  least  have  now  been  made  up  of  a  few  straggling  ranches,  but 
for  the  advent  of  the  indomitable  'Mormon'  pioneers.  They  came 
here  by  compulsion;  that  is,  they  had  to  get  away  somewhere  from 
plunder  and  extermination.  Civilization  had  shut  its  doors  against 
them,  and  compelled  them  to  desert  lands  bought  from  the  govern- 
ment, and  homes  erected  by  patient  toil,  in  the  intervals  of  peace, 
for  which  they  have  never  received  any  recompense.  Two  years' 
travel  brought  them  here  decimated  but  not  destroyed.  The  land, 
Indians,  crickets  and  drought  were  here  before  them.  The  few 
streams,  far  apart  from  each  other,  rushed  down  canyons  untrav- 
ersed,  roadless  and  bridgeless.  These  had  to  be  explored,  cut 
through,  blasted,  graded  and  cleared  ;  for  here  in  almost  inacces- 
sible fastnesses  was  timber  for  building  and  fuel ;  and  water,  after 
intense  labor  and  a  struggle  now  unappreciated,  was  brought  on 
to  the  thirsty  soil,  and  thus  the  scorched   deserts  were  forced  to 


other  Forms  of  Mormon  Cooperation.  435 

yield  a  scanty  crop — if  crop  it  could  be  called.  If  farms  had  to 
be  fenced,  it  could  only  be  done  by  united  efforts — co5peration. 
If  ditches  and  canals  had  to  be  made,  no  facilities  were  there 
but  the  pick  and  shovel  in  the  hands  of  toil ;  if  roads  had  to  be 
made,  each  man,  and  boy,  and  team  worked  as  though  they 
alone  had  to  reap  the  benefit.  Everything  was  new  ;  everyone 
was  without  experience;  but  nerved  by  the  needs  of  personal  salva- 
tion, by  love  of  wife  and  children,  by  dread  of  famine  and  death, 
by  the  spirit  of  freedom  and  faith  in  God,  one  foothold  after 
another  was  made.  Everywhere  was  encountered  the  same  labor, 
the  same  difficulties  and  the  same  necessities  ;  but  emboldened 
and  encouraged  by  success,  these  sturdy  'Mormons'  persevered 
until  for  nearly  eight  hundred  miles  north  and  south,  and  in 
numberless  quiet  valleys  east  and  west,  the  streams  have  been 
diverted,  canyons  explored  and  cleared  out,  until  nearly  300,000  of 
an  enterprising  and  not  easily  discomfited  population  fill  Utah  with 
sounds  of  industry  and  peace.  Thousands  of  miles  of  canal,  and 
tens  of  thousands  of  ditches  speak  of  prodigious  labor,  and  testify 
to  the  subtle  power  of  cooperative  work.  Thus  cooperation  has 
given  us  farms,  orchards,  homes  and  population  ;  it  has  given  the 
people  renown  for  patience,  endurance  and  success  ;  it  has  testified 
to  moral  courage,  to  industrial  unity,  to  religious  influence  and 
faith,  and  pointed  an  example  whose  power  is  felt  throughout  the 
inter-mountain  region,  on  the  sunny  slopes  of  the  Pacific,  on  the 
great  plains  of  Colorado,  and  in  all  the  region  roundabout. 

"Our  first  lumber  mills,  grist  mills  and  factories,  as  well  as  our 
settlements,  were  founded  on  the  principles  of  cooperation  that  has 
its  base  in  a  religious  faith  ;  and  now  our  stores,  tanneries,  woolen 
mills,  dairies,  and  cheese  factories,  our  churches,  schools,  and  tem- 
ples, as  well  as  our  ditches  and  farms,  bear  witness  to  the  potency 
of  cooperation. 

"  In  regard  to  irrigating  companies,^  I  may  say  that  the  institu- 
tion of  monopolies,  the  selling  water  rights,  and,  under  the  protec- 
tion of  law,  the  exaction  of  money  for  this  privilege,  are  not  likely 
to  be  multiplied  in  districts  colonized  by  a  'Mormon'  population, 
who  will  make  their  own  facilities,  creating  by  labor  the  water- 

^  I  asked  Mr.  Caine  for  the  points  in  favor  of  voluntary  coopera- 
tion on  the  part  of  land-owners  in  securing  water  for  irrigation, 
as  opposed  to  the  plan  of  allowing  a  large  company  to  do  the  work, 
and  then  charging  the  farmers  for  the  Avater.  The  latter  plan  is 
much  used  in  Colorado,  many  of  the  companies  are  English,  and 
as  nothing  can  be  produced  without  the  water,  the  demands  of  the 
company  are  apt  to  be  exacting  and  oppressive. 


430  Three  Phases  of  Cooperation  in  the  Vt'est, 

courses  needed,  and  combining  them  with  the  land  in  such  a  way 
that  he  who  is  without  money  is  equally  eligible  to  a  share  of  the 
mountain  streams,  if  his  own  right  arm  is  only  willing  to  join  with 
that  of  his  neighbors  in  performing  the  necessary  work." 

On  this  same  point  Naisbitt  says  : 

"  In  the  colonization  of  Utah  and  adjoining  territories,  where 
irrigation  is  essential  to  successful  agriculture,  ditches  and  canals 
were  usually  the  creation  of  united  effort  or  cooperation.  *  *  * 
The  original  settlers  did  work  on  the  ditches  in  proportion  to  the 
amount  of  land  they  desired  to  cultivate.  Residents  coming  in 
afterwards  would  be  called  upon  to  take  up  shares  which  would  be 
valued  at  the  labor-cost  of  the  work  done  per  acre.  *  *  *  if 
land  was  obtained  in  the  district,  and  settlers  increased  beyond  the 
water  supply  of  the  ditches  or  canals  already  made,  enlargement 
has  been  common,  and  many  of  the  old  cooperators,  in  order  to 
secure  protection  in  their  vested  rights,  have,  under  local  laws  be- 
come incorporated  ;  but  the  instances  are  rare  in  Utah  where  the 
ditches  have  been  made  by  companies  or  individuals  who  had  no 
interest  in  the  land,  but  were  simply  sellers  of  water  privileges. 
*  *  *  In  many  cases  the  ditches  have  cost  as  high  as  fifty  or 
sixty  dollars  per  acre  ;  and  one  dollar  per  acre  for  labor  is  not  an 
uncommon  levy  for  repairs." 

The  ''gentile''  authorities  tell  of  these  settlements  as 
being  the  means  by  which  the  Mormons  have  obtained  con- 
trol of  all  the  valuable  land  in  Utah  and  large  tracts  in 
Nevada,  Wyoming,  Arizona,  New  Mexico  and  Colorado. 
They  say  that  whenever  a  new  and  fertile  canyon  is  dis- 
covered, or  a  watercourse  capable  of  being  used  in  irrigation, 
the  supreme  authority — the  church — sends  out  a  ^Mormon 
bishop  with  a  band  of  slavish  followers,  who,  under  his 
direction,  homestead  and  pre-empt  such  land  as  will  com- 
mand the  water  supply  for  the  whole  tract;  and  under  his 
direction  hold  and  improve  it.  That  the  Mormons,  by  their 
system  of  colonization,  have  thus  obtained  command  over 
vast  tracts,  not  only  in  Utah,  but  in  the  commonwealths 
named,  is  indisputably  true.  The  only  question  is  as  to  the 
"  slavishness''  of  the  workers. 

Much  work  on  the  earlier  railroads  was  done  in  the  same 
way.     "The  territory  being  largely  agricultural,  and  pos- 


other  Forms  of  Mormon  Cooperation.  437 

sessing  surplus  labor,  was  in  good  condition  for  the  work. 
Much  of  it  was  done  after  seeding,  and  before  harvest;  much, 
also,  after  harvest  and  toward  winter.  *  *  *  *  rpj^^ 
call  was  made  on  the  settlements  in  something  like  an  equi- 
table proportion  for  a  contingent  of  men  and  teams."' 

That  all  these  forms  of  cooperation  are  made  possible  only 
by  the  Mormon  religion  is  admitted  and  affirmed  by  all. 
Caine  thus  concludes  his  statement  of  the  case  : 

"  The  essential  elements  of  cooperation  as  it  exists  in  Utah  can- 
not be  found  elsewhere.  Nevertheless,  in  the  chapters  of  our  his- 
tory there  are  lessons  for  the  sociologist,  the  political  economist, 
the  statesman,  the  philosopher,  and  the  religionist,  separately  or 
combined.  The  unique  experiment  of  Mormon  co5peration,  its 
successes  and  failures,  its  present  and  future,  could  be  best  studied 
on  the  spot.  It  is  only  regrettable  that  ignorance  and  prejudice  are 
so  combined,  that  almost  none  believe  that  any  good  can  come  out 
of  this  despised  Nazareth  of  our  magnificent  country.  Our  people 
are  not  anxious  to  place  themselves  under  the  tyranny  of  monopo- 
lists, particularly  if  this  has  to  be  done  at  the  expense  of  self-help 
— the  boast  of  freemen — or  of  that  united  help,  which  supersedes 
the  motto  of  'live  and  let  live,'  by  the  more  Godlike  one,  'live 
and  help  live,'  which  is  as  much  the  key  to  Mormon  history  in  the 
past  as  it  will  be  to  the  triumphant  vindication  of  its  principles  in 
the  future." 

Whatever  else  may  be  considered  doubtful  in  the  state- 
ments or  arguments  advanced  by  Mr.  Caine,  I  suppose  that 
no  one  can  intelligently  deny  the  truth  of  what  he  says 
regarding  the  importance  of  this  great  social  experiment  to 
students  of  social  science.  For  present  purposes  it  is  only 
necessary  to  notice  that  from  the  lower  classes — that  is  from 
the  usually  successless  classes  of  this  country  and  of  Europe — 
has  been  drawn  a  people  that  has  achieved  great  economic 
sitccess  under  enormous,  difficulties.  Bronterre  O'Brien 
said  of  them,  that  they  had  ' '  created  a  soul  under  the  ribs 
of  death;''  and  their  labors  have  attracted  the  interested 
attention  of  men  like  Eobert  Owen  and  George  Jacob 
Holyoake.      Their    enemies   say  that  they   have   gathered 

iH.  W.  Naisbitt 


438  Three  Phases  of  Cooperation  in  the  West. 

together  "the  off-scourings  of  society,"  but  even  were  this 
true,  it  would  be  of  the  greatest  importance  if  we  could 
learn  how  '-'the  off-scourings  of  society'^  might  thus  be 
utilized  in  the  up-building  of  such  industrial  successes.  To 
say  that  it  has  been  done  by  reducing  the  people  to  virtual 
servitude  does  not  seem  plausible,  because  with  Federal 
artillery  bearing  on  Salt  Lake  City,  and  Federal  officers  all 
over  the  territory  willing  not  only  to  protect,  but  reward 
apostates,  it  is  evident  that  nothing  like  physical  or  political 
servitude  can  exist,  A  large  majority  of  Mormons  own 
their  homesteads,  and  ownership  of  land  not  only  has  been, 
but  is  the  badge  and  guarantee  of  economic  freedom. 

It  is  interesting  to  note  that  tyranny  and  freedom  may 
produce  results  that  in  their  outward  manifestations  are 
very  much  alike.  A  far-seeing  tyrant  may  wield  his  power 
entirely  in  the  interests  of  those  he  governs,  and  a  free 
people  may  resign  and  re-resign  their  power  entirely  into 
the  hands  of  the  man  or  men  best  able  to  use  it  wisely. 
Disinclination  and  refusal  to  do  this  very  thing  has  been  the 
greatest  stumbling  block  in  the  way  of  successful  coopera- 
tion. Numberless  enterprises  have  failed,  either  because 
the  leaders  could  not  be  trusted  fully,  or  because  the  men 
would  not  trust  them  as  fully  as  they  might.  Brentano  says 
that  cooperative  enterprises  can  accomplish  most  for  working- 
men  whose  intellectual  standard  is  ordinary,  but  whose 
moral  standard  is  above  the  average.  The  Mormons  claim 
that  they  have  been  successful  because  a  religious  element 
has  come  in  that  has  made  the  leaders  trustworthy  and  the 
followers  trustful.  1  know  that  to  hint  at  a  superior  moral 
standard  among  the  Mormons  is  to  cause  most  peojole  to  fly 
off  at  a  tangent.  That  is  not  to  be  helped.  But  if  by  the 
morality  of  a  people  we  understand  the  willingness  to  fulfill 
all  their  social  duties,  as  they  understand  them,  it  can 
hardly  be  denied  that  the  Mormon  religion  has  begot  in  its 
converts  a  morality  higher  than  the  average.  That  this 
same  religion  has  also  resulted  in  a  spiritual  servitude  that 
more  than  counterbalances   other   good   results,  there   are 


other  Forms  of  Mormon  Cooperation.  439 

grounds  to  believe.  It  is  pertinent  to  our  purposes  merely 
to  note  that  here  we  have  a  chance  to  study  the  industrial 
and  economic  bearings  of  a  religious  faith. 

Its  practical  lesson  for  the  common  man  is  that  religion 
and  morality  have  economic  value.  It  behooves  us^  who 
look  for  no  "'latter  day^'  inspiration  and  are  little  inclined 
to  submit  to  the  guidance  of  a  prophet,  to  learn  this  prac- 
tical lesson  from  the  experience  of  others,  from  the  teachings 
of  Christianity  and  of  common  sense,  and  not  to  wait  until 
it  has  been  taught  us  "by  the  discipline  of  our  virtues  in 
the  severe  school  of  adversity." 


521 


DATE  DUE 

APR 

1      1981 

h}Mf  F{ 

8  12  J981 

GAYLORD 

PRINTED  IN  U   S   * 

3   1970  00427  2271 


^ 


PERM'.nnvyirf 


